Pawn shops are extremely common these days, with more than 12,000 operating in the United States alone. But do you ever wonder how this business was started? For as long as currency has been invented people have always had financial struggles and often find themselves in situations where they cash fast. Due to this problem, pawning is one of the oldest professions in the world.
According to the History Channel the first pawn shops emerged in Ancient China more than 3,000 years ago. This was used as a method to grant short-term credit to peasants. Pawnbroking also took off in Ancient Greece and Rome allowing merchants to get small shops up and running. The Catholic Church placed restrictions on charging interest in the middle ages, but these regulations were toned down in 14th and 15th century Europe because short-term credit proved to be an effective way to finance businesses, as well as temporarily aiding the poor.
What does the word “pawn” actually mean? Well also according to the History Channel, it stems from the Latin word “patinum,” meaning cloth or clothing. For working class people, more often than not their most valuable item was their clothes. During the 19th century, people with little to no money would often pawn their clothes on Monday and retrieve them on Friday as a means to have enough money to make it through the week.
In 1872 England established new regulations protecting pawnbrokers who accidently sold stolen items; simply entitled “The Pawnbrokers Act of 1872.” In addition to protecting the pawnbrokers the act also restricted the amount of interest that can be charged on pawned items and created a set of guidelines establishing rules and regulations, many of which are still used today.
Some interesting facts about the history of pawning: During the Great Depression pawn shops were among the only institutions that could offer cash to people, as banks failed and citizens had to give up their prized possessions in order to live. The popular nursery rhyme: “Pop Goes the Weasel” actually refers to pawning. A “weasel” is actually referring to a shoemaker’s tool (not the animal) and “pop” is a slang term for pawning. Hence the verse “That’s the way the money goes, Pop! Goes the weasel.” Another interesting fact is that St. Nicholas (or Santa Clause for some of you) was known as the patron saint of pawnbrokers and bankers
Today pawn shops operate as mini-banks for people who don’t have bank accounts and still are there for people in need of quick cash. Certified pan shops offer extremely low interest rates and all though it may sometimes seem like they are “low-balling” customers, the majority of shops offer viable solutions for people in need of quick cash. Of course, they also serve as an area of exchange for people looking to buy or sell unique or rare items.