Early records of pawnbroking suggest that in the 5th Century, Buddhist monasteries in China were the first pawnbrokers. During this era, people of means would also form associations with the monasteries to open up pawnshops that would serve peasant farmers. This alliance with monasteries would help the wealthy evade certain taxes; in which the Buddhist monasteries were exempt.
Pawnbroking history in the UK
Pawnbroking in the UK became an incentive for the poor to avoid the workhouse (a rough place to work and live for those who were unable to support themselves). A popular rhyme was developed in the 1800s to depict the state of affairs. The song referred to ‘popping’ a ‘weasel’. This literally meant pawning a coat. The poor would visit a pawnbroker to pawn their most basic valuables including their coats to get money for basic foodstuffs. In addition to coats, people would pawn their shoes and wedding rings just to get by.
A symbol of St Nicholas was used as a sign of pawnbroking. The sign constituted of three golden balls. Because of high illiteracy levels, this sign was used to indicate a pawn shop. History states that pawnbrokers entered England with the Normans and the Jewish settlers. At the time, pawnbroking and the philosophy therein was condemned in the Christian culture and religion. Jews were thriving in the trade and this brought simmering tensions with the rest of society. Increasing wealth for the Jews led to an anti-Jewish impulses. A case in point is when Aaron of Lincoln became the wealthiest man in England surpassing the king in 12th Century.
Pawnbroking and the wealth it created for pawnbrokers led to some bloody massacres in 1189 and 1190. The accumulation of great wealth led to a passing of a law called the Statute of Jewry by King Edward I in 1275. This law made the charging of very high interest while pawning illegal. This exorbitant interest rate was referred to as usury. To this end, many English Jews were arrested and their property taken by the Crown. In fact, historical records state that 300 pawnbrokers were hanged after being found guilty.
Resurgence of pawnbroking in England
After pawnbroking suffered a heavy blow, the practice would regain momentum in the 1300s. With 1000 silver marks, the Bishop of London commissioned the establishment of a free pawnshop in 1361. Pawning once again became relevant and was no longer a reserve for the needy. When King Edward III needed to conquer France in 1338, he pawned his jewels to raise the money. This renewed energy dulled up after the 2nd World War. At that point, many people were no longer living from hand to mouth and some state incentives had been established to make life better.
The 1980s recorded a huge credit boom with pawnbroking becoming very vibrant for all manner of people. Pawnbrokers had to however adhere to new strict laws that governed the trade. The Consumer Credit Act of 1974 set the pace with pawnbrokers needing licensing from the Office of Fair Trading. With these new rules, pawnbroking received a face lift becoming a more revitalized option for many. Initially, the trade had suffered a dubious reputation where exploitation of the poor was involved.
Today, pawnbroking is preferred by many over a payday loan or a bank loan. With fair practices and convenience therein, more and more people find that pawning their valuables is highly beneficial to accessing fast secured loans.