Pawnshop

pawnshop

the premises of a pawnbroker

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Pawnshop 

(Russian, lombard), a money-lending institution dealing in pledges. It lends money on the security of pawned personal property. The first pawnshop was established in France during the rule of Louis XI (1461-83) by moneylenders who were immigrants from Lombardy (Italy). In the 15th century pawnshops appeared in Italy, Germany, and other countries. In the 19th century pawnshops existed in all capitalist countries; the majority of them were in the hands of big capitalists. In the 20th century the pawnshop business has been dominated by the monopolies, which levy high interest rates and receive big profits mainly from the poor.

In Russia in 1733, some pawnshop operations were started by the Monetary Office on the security of gold and silver objects. In 1772 in St. Petersburg and Moscow, government pawnshops were opened. The development of a network of pawnshops financed on the shareholding principle dates from the late 19th and early 20th centuries. In 1917, in addition to the joint-stock pawnshops, there were 109 municipal (city) pawnshops. When in 1918 the prerevolutionary lending institutions were liquidated, the old pawnshop system was also abolished. In 1922-23 in the USSR, state pawnshops were established on a self-supporting basis under the management of the local Soviets within the system of public service institutions. Their goals are to safeguard for a small fee objects of personal and household use and also to lend money on the pledge of these objects as security. The accepted property is insured at the expense of the pledger. The amount of the loan can reach 75 percent of the value of the pledged objects; for precious metals and stones, pearls, and gold watches it can go as high as 90 percent.

The maximum amount of the loan that may be given in a single transaction, the rate of interest on loans, and the term of the loan are fixed. The volume of credit issued to Soviet people in 1972 amounted to approximately 40 million rubles. The pawnshops have the right to use bank credit for the expansion of their operations.

A. K. BIRKIN