The result of the Select Committee was the Pawnbrokers Act of 1872, which repealed, altered and consolidated all previous legislation on the subject, and is still the measure which regulates the relations between the public and the "brokers of pawn." Based mainly upon the Irish law passed by the Union Parliament it put an end to the old irritating restrictions, and reduced the annual tax in London from 115 to the 17, los. paid in the provinces. By the provisions of the act (which does not affect loans above La)), a pledge is redeemable within one year, and seven days of grace added to the year. Pledges pawned for los. or under and not redeemed in time become the property of the pawnbroker, but pledges above zos. are redeemable until sale, which must be by public auction. In addition to one halfpenny for the pawn ticket, or one penny if the loan is over los., the pawnbroker is entitled to charge as interest one halfpenny per month on every 2S. or part of 2S. lent where the loan is under 4os., and on every 2S. 6d. where the loan is above 4os.; and since 1922 he has been allowed to charge in addition an extra halfpenny for each 5s. or part of 5s. lent. "Special contracts" may be made where the loan is above 4os. at a rate of interest agreed upon between lender and borrower. Unlawful pawning of goods not the property of the pawner, and taking in pawn any article from a person under the age of fourteen, or intoxicated, or any linen, or apparel or unfin ished goods or materials entrusted to wash, make up, etc., are, inter alia, made offences punishable by summary conviction.
Elaborate provisions are made to safeguard the interests of bor rowers whose unredeemed pledges are sold under the act. Thus the sales by auction may take place only on the first Monday of January, April, July and October, and on the following days should one not be sufficient. This legislation was, no doubt, favour able to the pawnbroker rather than to the borrower. The annual interest on loans of 2S. had been increased by successive acts of parliament from the 6% at which it stood in 1784 to 25% in 1800, and to 27 in 186o—a rate which was continued by the meas ure of 1872. The annual license payable to government by pawn brokers was in the year 1939 17.10.o., and an additional 15.15.o. was payable for a license to trade in plate without regard to weight.
The growth of pawnbroking in Scot land, where the law as to pledge agrees generally with that of Eng land, is remarkable. Early in the 19th century there was only one pawnbroker in that country, and in 1833 the number reached only 52. Even in 1865 there were no more than 352. In 1928 there were 238 in Edinburgh and Glasgow alone. In Ireland, as in the Free State and in Northern Ireland, the rates for loans are practically identical with those charged in England, but a penny is paid for any ticket. Articles pledged for less than 1I must be redeemed within six months, but nine months are allowed when the amount is between 3os. and £2. For sums over L2 the period is a year, as in England. In Ireland, too, a fraction of a month is cal culated as a full month for purposes of interest, whereas in Eng land, after the first month, fortnights are recognized. In 1838 there was an endeavour to establish monts de piete in Ireland, but the scheme was so unsuccessful that in 1841 the eight charitable pawnshops that had been opened had a total adverse balance of
In 1847 three were left; eventually they also collapsed.
The pawnbroker in the United States is, gen erally speaking, subject to considerable legal restriction, but viola tions of the laws and ordinances are frequent. Each state has its own regulations, but those of New York and Massachusetts may be taken as fairly representative. "Brokers of pawn" are usually licensed by the mayors, or by the mayors and aldermen, but in Boston the police commissioners are the licensing authority. In the State of New York permits are renewable annually on pay ment of $5oo, and the pawnbroker must file a bond with the mayor, executed by himself and two responsible sureties, in the sum of $1 o,000. The business is conducted on much the same lines as in England, and the rate of interest is 3% per month for the first six months, and 2% monthly afterwards. Where, how
ever, the loan exceeds $1oo the rates are 2 and 1% respectively. To exact higher rates is a misdemeanour. Unredeemed pledges may be sold at the end of a year. Pawnbrokers are not allowed to engage in any kind of second-hand business. In the state of Massachusetts unredeemed pledges may be sold four months after the date of deposit. The licensing authority may fix the rate of interest, which may vary for different amounts, and in Boston every pawnbroker is bound to furnish to the police daily a list of the pledges taken in during the preceding 24 hours, specifying the hour of each transaction and the amount lent.
The fact that on the continent of Europe monts de piete are almost invariably either a state or a municipal monopoly necessarily places them upon an entirely dif ferent footing from the British pawnshop, but, compared with the English system, the foreign is often very elaborate and rather cumbersome. Moreover, in addition to being slow in its opera tion, it is, generally speaking, based upon the supposition that the borrower carries in his pockets "papers" testifying to his identity. On the other hand, it is argued that the English borrower of more than £2 is at the mercy of the pawnbroker in the matter of interest, that sum being the highest for which a legal limit of interest is fixed. The rate of interest upon a "special contract" may be, and often is, high. For the matter of that, indeed, this system of obtaining loans is always expensive, either in actual interest or in collateral disadvantages, whether the lender be a pawnbroker intent upon profit, or the official of a mont de piete. In France pawnshops are a municipal monopoly held in Paris by the Credit Municipal and the head institution claims to be the greatest pawnshop in the world. Officially styled "Mont de Piete" it is popularly known as "ma tante," just as the pawnbroker in England is often called "my uncle." It is, however something more than a pawnshop and, in certain respects, fulfils some of the functions of a bank. The Credit Municipal was founded by Louis XVI. and was opened in 1777, since which time it has been main tained by every successive government ; Napoleon recognized it in 1804. By degrees the business increased so considerably that branches had to be opened in many quarters of Paris, and there are now twenty of them. Broadly speaking the Credit Municipal lends on all marketable articles, and its customers are by no means limited to the poorer classes. The well-to-do, for example, when leaving Paris for the summer, often pawn their silver, the opera tion costing less than the hire of the necessary space in a safe deposit. The minimum loan is three francs. The habit of pawn ing clothes and wearing apparel is steadily decreasing, while the deposit of jewellery and other valuables is growing. The one tendency is due to the increased prosperity of the working classes; the other to the high cost of living. Advances are made for six months, and if they are not then repaid the loan may be renewed for a similar period. If at the end of a year the loan is neither repaid nor renewed, the pledge is sold, the borrower receiving the difference between the amount of the debt and the price obtained for the pawned article. The borrower may, however, repay by instalments. Rates of interest vary, but bank and Stock Exchange rates are followed as closely as possible and the average is about 7%. On pledges valued at more than 500 francs the interest is slightly higher than on those of smaller worth; on shares the rate is usually a little lower. Since 1919 traffic in pawn tickets has been forbidden. The law of July 25th, 1891, authorized the Credit Municipal to lend money on stocks and bonds accepted or guaranteed by the Banque de France, such as Government and municipal issues. Loans on these paper securities are limited to 3,00o francs, but it is considered probable that the limit will presently be raised to i 0,00o francs.