The Ancient History of Pawnbroking
Over 3,000 years ago, pawn shops started in Ancient China as a method of lending short-term credit to the poor. Some pawnbrokers were independent, but over time most of these businesses were run through small pawn shops. Pawnbroking exploded in ancient Greece and Rome, which gave pawnbrokers a way to get their shops running profitably.
In the Middle Ages, there were some slight restrictions placed on loan interest by the Catholic Church, slowing the growth of pawn shops. These rules were stopped in the 14th and 15th centuries in Europe as pawnbroking became a vital way of funding business projects and allowing partial help to the poor. Well to do families like the Lombards in England and the Medicis in Italy soon became well known as the money-loaning powers. King Edward III pawned his jewels to the Lombards in 1388 to help fund the war against France, and Queen Isabella of Spain apparently pawned her jewellery as collateral to finance Christopher Columbus’ voyages to the New World.
The word ‘pawn’, originally comes from Latin. It comes from the word patinum meaning clothing or cloth. Clothes were quite often the most valuable goods that the working class population owned. Even though the majority of pawnbrokers have been privately owned, there were some public pawn shops set up as charitable funding in Europe in the 18th century, their aim was to offer low interest loans to the poor to help wipe out debt. The method of pawning your clothes on a Monday and then retrieving them on Friday (payday) was a very common way for people to make it through the working week during the 19th century.
