Sunday, August 4, 2002

Pawn Shops: History

In actuality when we think of a pawnshop, we speak in terms of inventory credit. This form of loan began its history in Europe, more precisely, in Italy in the early fifteenth century. The initiators of the secured loan were the Franciscans, who sought to support poor people to raise money to pay their taxes. Thus, its first customers were farmers, artisans, small traders and the poor who had no permanent job.

In ancient times to the pawn shops were known as Monte Pio, which means "box of piety," because it was literally a sort of metal box in which both the money and kept the things left in pledge for the loan. The term "mercy" was used not only for the reason that he was a pious act helping the needy, but also because it was to differentiate the income from the coffers of the monks, that is, since they had different "mountains" or savings intended for different types of support, should specify that the mountain tweet was intended for the secured loan. Thus, the Franciscans had savings for government support for charities and nonprofit.

Thus, the pawn shops covering the needs of middle class and low, through lending, which is guaranteed with clothes and jewelry. To fulfill its purpose of providing assistance, the first pawn obtained their resources through the acquisition of metal deposits, primarily gold. Similarly, resorted to the proceeds of the offerings, tithes, support provided by the royal crown and the proceeds of the various fairs and religious celebrations.

Since, almost immediately, resources were insufficient to maintain a sustainable collateral activity was necessary to charge interest on loans made. Such interests were supported by the Catholic Church. In order not to fall into a sort of "usury" which became a problem for congregations who engaged in this kind of support took place Lateran Council, in the year 1515. This council sought you establish the possibility of interest rates that would be generated in the interest incurred by the secured loan. Despite the criticism did not wait for the Council of Trent, which lasted 18 years, the time spent was necessary to know the benefits are granted pawnshops.

It was so, from the eighteenth century, then called Montes Pious, began to be sponsored by private enterprise, ie by the Royal Crown and the nobility, who maintained the operation of pawnshops, based on inspiration charitable religious Franciscans.

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