History of Pawnbroking

Pawnbroking goes back to ancient China, where Buddhist monasteries loaned money
to peasant farmers at affordable rates of interest as a service to the
community. The monasteries would accept a simple possession as security against
the loan, and so began pawnbroking, a democratic kind of loan that anybody
could afford. Ancient Babylon, Greece and Rome all had pawnbrokers too, a
testament to the need of people in those civilizations for a quick and easy
type of secured loan.

In the Middle Ages, kings and queens often used pawnbrokers when they were
short of a bob or two. Queen Isabel of Spain pawned some of her crown jewels to
fund Christopher Columbus’s jaunt across the Atlantic to “discover” America,
while the English kings Edward III and Henry V both pawned their crowns to
finance wars against France, and Henry VII even pawned two of his noblemen, Sir
Thomas Boucher and the Marquis of Dorset, to pay for troops in his battles
against Richard III.

Back in those days, not many people could read, so shops had signs to tell
customers what they were. The pawnbrokers’ sign was three balls, originally the
symbol of the Italian Medici family, who rose from humble origins as
apothecaries and moneylenders to become an important banking firm, and rulers
of Florence (their supporters used to run into battle shouting the Italian
equivalent of, “Balls! Balls! Balls!”). Other Italian bankers and moneylenders
wanted to associate themselves with the Medicis’ success, so they adopted the
“balls” symbol too. One of the most important was the House of Lombard, who set
up pawnbroking shops right across Europe, all with the three balls sign. But in
China, where it all began, the pawnbrokers’ symbol was – and still is – a bat
holding a coin, the bat representing good fortune.

In the sixteenth and seventeenth centuries, England’s parliament passed a
series of laws to regulate pawnbroking and keep out sharp operators. Nowadays
all respectable pawnbrokers in England and the rest of the UK are registered
and follow strict guidelines, as opposed to loan sharks, who operate outside
the law, charge illegal rates of interest, and enforce repayment with methods
that don’t bear thinking about.

Pawnbroking really took off in Britain with the industrial revolution, when the
number of pawnbrokers in the country shot up from just seven hundred and fifty
odd in 1750 to some four and a half thousand a century later. William Hogarth’s
famous 1751 Gin Lane etching features a pawnbroker’s shop, used by gin-addicts
to borrow money for more drink (not a good idea!).

In the nursery rhyme Pop goes the Weasel, “pop” means into pawn (a
pawnbroker’s was often called a “pop shop”), and the weasel (weasel and stoat,
that is) means your coat. Poor families often had to pawn their best coat
during the week to pay for provisions like half a pound of tuppenny rice or
half a pound of treacle, but they’d redeem it on pay-day so they could wear it
for church on Sunday. Then they’d more than likely pawn it again during the
week.

Pawnbrokers became less important after World War Two, when state social
security came in, and people didn’t have to live so much from hand to mouth,
but in the 1980s, pawnbroking became popular again as an easy form of credit
that was available to anyone.

In 1974, the passing of the Consumer Credit Act meant that all pawnbrokers had
to be licensed by the Office of Fair Trading, and they had to make their terms
and conditions plain and clear to customers pawning goods. Pawnbrokers are now
regulated by the FCA and have to adhere to strict rules and guidelines.
Meanwhile pawnbroking, once the preserve of the very poor, who might
have to pawn their Sunday best coat or maybe their wedding ring to tide them
over for a week, is now used by all sorts of people to solve their cash flow
problems. Nowadays you can pawn a hi-fi, a TV, even a car. Unfortunately
however, pawning noblemen isn’t really an option any more, not even for the
Queen.

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