Pawning transactions are effected from:— (a) funds available from the endowment re serve; (b) those obtained by way of loan or which are paid as interest into the treasury.
The conditions of the loans are fixed each year by the administration subject to the ap proval of the Minister of the Interior or the prefect as the case may be. When the endow ment is sufficient either to cover the general expenses or to lower the interest to the legal rate of 4 per cent, the excess receipts are al lotted to hospitals or other charitable institu tions, by decision of the prefect acting on th. recommendations of the municipal council.
A public administrative regulation deals with the appointment and supervision of the in termediary officials nominated to the manage ment of pawnshops. The law of 1851 not only dealt with questions concerning the organiza tion of pawnshops, but prescribed in detail under what conditions the borrowers were authorized to demand the sale of their pledges. Every depositor, after a delay of three months from the date of the deposit, has the right to demand, on the dates of sale fixed by The regulations, the sale of his pledge, before even the date noted on his ticket. The price of the article is handed without delay to the borrower-pro prietor thereof, after deduction of the interest due and the amount of expenses fixed by the regulations. New merchandise given as pledge can, however, only be sold after the expiration of one year. Titles of debt, tickets and docu ments appertaining to the administration of pawnshops are exempt from fiscal taxes and stamp duties under the law of 1851. This law, however, stipulates that with the exception of exemption from taxes, none of its clauses are applicable to pawnshops established on a purely charitable basis, and which, by means of dona tions or special endowments, lend money gra tuitously or at an interest lower than the legal rate. A transitory article of the law of 1851 provides that the terms of the law shall be ap plicable to those existing pawnshops which have been founded as pawning establishments as dis tinct from all others.
The state council, on being consulted re garding the scope of this transitory text, ex pressed the opinion that it was necessary to divide the pawnshops into three categories:— (1) those established on a purely, charitable basis and which by means of special endow ments lend money gratuitously or at an interest lower than the legal rate; (2) those lending money neither gratuitously nor at an interest lower than the legal rate are authorized to re tain their excess receipts to constitute or in crease their endowments; (3) those lending money neither gratuitously nor at an interest lower than the legal rate pay all or part of their excess receipts into the funds of the charitable institution under which they were founded.
The state council afterward defined the ex pression °pawning establishments as distinct from others') to the effect that such term was intended to designate pawnshops previously au thorized to retain their excess receipts for the purpose of constituting or increasing their en dowments; but the law of 1851 could not affect the privileges of the charitable institutions which profited wholly or in part by the excess revenues. As a result of this interpretation, very few of the pawnshops connected with charitable institutions by common interests were able to free themselves from this financial con trol, which unquestionably hindered their evolu tion in the way of reduction of tariffs.
The regulations for loans on corporal guar anty is still further defined by the decree of 24 March 1852, and especially by the general rules dated 30 June 1865, the principal provi sions of which will be outlined in the first para graphs of Part II. This decree of 1865 divided, in particular, all pawnbroking businesses into two categories :— firstly, individual firms, the funds necessary for the carrying on of whose business is provided by a single treasury and who have one office only for the transaction of each particular kind of business with the pub lic; secondly, compound pawnbroker's enter prises, the variety and extent of whose trans actions either necessitate the establishment of branches or auxiliary offices, or several offices, sections or treasury centres. The pawrrbroking business carried on in Paris falls under the latter category. Finally, a law dated 25 July 1891 authorized the Paris pawnshops to loan money on certain fully paid-up scrip to bearer, no operation, however, to exceed an amount of 500 francs ($1OO) per borrower. The same law empowers the government to extend, by decree in the form of regulations concerning public administration, the same authorization to such provincial pawnbrokers' enterprises as the gov ernment shall deem to be in a position to ful fil the requirements prescribed for this kind of business. It is no longer a question, as re gards loans on scrip, of an exclusive privilege as in the case of loans on corporal security, but of a simple right, limited and carrying with it different facilities, to do business concurrently with banks and other banking establishments.