The record-union., 1894-01-06
REGULATING THE PAWN BUsI-
NESS.

New York papers are advocating Off
cial control Of the pawnshops which levy
such an exorbitant tax upon the necessi-
ties of the poor. The pawnbroker fixes
the valuation upon the pledge, and for
loans of Sl00 or more may by law exact
per cent. interest for each of the first six
months and per cent. a month there
after. Under $100 the loans may pay
per cent. per month for the first six
months and per cent. per month there
after. So that nearly one-third as great
as the amount of the principal may be ex-
acted for twelve months loan.
These facts are commented upon indig-
nantly, and the demand is made for legis-
lation reducing the rates. But we fail to
SEQ how this is going to remedy the evil,
so long as the valuation of the pledge
is fixed by the lender. Much the
same objection is made to legal
Limitation that is made TO usury laws,
that it is an interference with the liberty
of the individual to contract as he sees fit.
But the pawnbroking business may be
said to stand outside of the lines of
such argument when usury is debated.
1t is an exceptional business that falls
under license classes and always has been
recognized as calling to be kept under
surveillance by the law.
In Paris probably is found the best
pawnbroking system. Its Mont de Piete
aged that it is practically free from scan
dal. 1t is under the supervision of Off
cials, who are kept within bounds by an
elaborate system of reports and examina-
tions. Only a low rate of interest is
exacted, and very nearly the market
price value of the pledge offered forms
is limited in its profits to a fixed sum, and
it must never exceed this maximum.
But the reason for the success of Mont
de Piete, and why it is so helpful
TO the poor, is that it is not
conducted with view to great gains
to private capital, but rather to
accommodatingly serve those whose
needs demand of them temporary sacri-
fees and the payment Of reasonable re-
ward to the capital. Denmark has some
thing such a system, and in our own
country Boston has set up system free
from most of the abuse of the pawn-shop.
An administrative council has charge of
the French Monte de Piete. and is subject
to a select legislative committee, while
all valuation for loan basis is fixed by a
Board of Appraisers, which is required
to ascertain the market value Of the
pledge and then lend upon four-fifths of
that price, if the goods are of gold or
silver; if they are of other character the
loan must be based upon three-fourths of
the market value.
Under this system the forfeited pledges,
when sold, must be disposed of publicly,
and if there is surplus earned in excess
of the loan and its interest, it is placed to
The credit of the pledgor, to be drawn
whenever he or she chooses. If it re-
mains, however, with the Monte de Piete
it earns interest for its owner for three
years. If it is not then claimed, the
whole sum escheats to the capital of the
institution.
It is not alone the poor who avail of
the Monte de Pietes in France and
Italy, but the rich and well-to-do also.
Tt will be remembered that in 1871, when
France was in such distress, the Com
nune by decree restored to all owners
articles of clothing, linen and bedding.
and all books and tools pledged at Mont
de Pietes for sums not exceeding twenty
francs without any payment of interest
or principle. Though this drew 100000
francs from these institutions, they were
eouaI to the demand.
There are now in France over sixty OF
these Mont de Pietes, and it is recorded
that never yet has there been scandal or
complaint about them. Belgium. Russia,
Holland and Germany have to some ex-