While credit may hardly be considered unavailable to the poor in wealthy countries today, it’s easy to think it only became so accessible in recent times. In truth, though there will generally be more eager lenders to the rich than to the poor, and while the forms of credit available to the latter have changed, loans could almost always be found by most people at some price. One of the oldest forms of lending, and one of the most persistently accessible by ordinary people, is pawnbroking. In Britain in the 1700s, more sensible regulation replaced religious zeal as the most significant factor affecting the business of pawnbroking. One of these rules required that pawnbrokers maintain records of transactions, records of value to historians today.
In 18th century Britain, pawnbrokers were frequently stigmatized, if not slandered. They were, unsurprisingly perhaps, accused of being predatory towards the poor who relied on them. However, their supposed offenses did not stop there. They were also commonly suspected of willingly receiving and lending against stolen goods. They were thus often accused of being complicit in criminal activity.
Critics also associated them with various other evils; pawnbrokers were frequently blamed for the vices of their poor borrowers. Their easy lending was seen as facilitating the drunkenness of the working classes, an increasing social concern during the 18th century ‘gin craze’, a period when increased consumption of gin was blamed for illnesses both social and medical. So, besides charging high interest rates, pawnbrokers were accused of encouraging stupidity, avarice and sin. Below are two 1751 prints by the artist William Hogarth that comment on the ‘gin craze’. Pawnbrokers feature in both, on the right in ‘Beer Street’ (left) and on the left in ‘Gin Lane’ (right).
By the 1700s, attitudes towards lending and credit had evolved to the point where moneylending was hardly still seen as illicit, at least in Britain, even if its immorality was still asserted by some. Indeed, pawnbroking had become a quite regulated business, a status which supposes some degree of acceptance. This trend culminated in a 1785 law requiring that pawnbrokers be licensed, a requirement that although imposing an additional burden on pawnbrokers bestowed even greater legitimacy as well.
Of particular value to historians, pawnbrokers in Britain were required to keep records of loans made and the goods they received as collateral under a 1757 law. The regulations went on though. For example, the liquidation of collateral worth over ten shillings was required to be conducted by auction in order that borrowers might see some recovery should the sale be for more than the amount owed to the lender. Not all rules were always followed though, especially with respect to the maximum legal interest rate on loans of just 5%. Some pawnbrokers charged over 30% interest per year.
Although imposing some limits on the lenders, the laws also protected the pawnbrokers. One provision in the 1757 law mentioned earlier clarified that if unredeemed for two years, lenders could sell any collateral and be protected from claims for wrongful sale made by suddenly reappeared borrowers. Another law in 1784 brought loans of under £10 outside the restraints of the ordinary usury laws and instead imposed a higher maximum rate of up to 20% annually on the smallest loans. Whether because of these protections or not, the number of pawnbrokers grew. By the end of the 18th century, there were 213 licensed pawnbrokers in London and another 431 elsewhere in the country.
Legislation required pawnbrokers keep records of their transactions and these provide information to historians about the workings of 18th century pawnshops. As just one example, the 1777-78 pledgebook of a pawnbroker in York survives to this day. The business was established by George Fettes in the center of York while he was in his early twenties; he would eventually sell the business in the 1820s. Fettes came to hold various local offices and was well regarded by local citizens and merchants, a sign that pawnbrokers were not everywhere loathed and that at least some were hardly the objects of public scorn. Indeed, George Fettes even went on to later serve as one of the first directors of a new savings bank founded in York in 1816.
Loans and Borrowers
A lot can be gleamed from Fettes’ pledgebook. For example, the records show that the majority of his loans were for two shillings or less. At the time, two shillings would have been a day’s wages for a relatively well-paid laborer. Surely even a member of the lower gentry would have no need for a loan so small, suggesting that most borrowers truly were ordinary people.
The typical collateral left by Fettes’ customers consisted of clothing, furniture, and metalware like irons and cutlery. Of course, some loans were larger though and these were secured by more valuable collateral, including watches and jewelry. A quarter of the pledges were redeemed within a week and a quarter more within a month. Clearly, most loans were rather short-term. That said, a large minority were for more than a year and 14% of pledges went unclaimed altogether.
Borrowers did not perfectly match the population profile of York. As it happens, the majority of George Fettes’ borrowers were women. Also, while most borrowers clearly did not come from the higher classes, they also tended not to be among the poorest. Pawnbrokers generally avoided the unemployed or destitute, leaving them to rely on even less discerning lenders if they could receive loans at all. Indeed, defenders of pawnbrokers in the 18th century would often point out that their clientele were usually the industrious poor in need of occasional assistance and not the destitute drunks that opponents accused them of enabling.
While most borrowers may have needed only occasional assistance, a few used the services of pawnbrokers very regularly. In fact, some of the poor visited pawnbrokers extremely frequently, with pledged collateral often being redeemed quickly only to be pledged again. The pledgebooks of some pawnbrokers show the same customers returning several times a day.
Such frequency may seem unbelievable. However, this might not always be the result of a sudden windfall, however small, followed by a rather quick return to borrowing. Instead, some customers used the services of pawnbrokers in rather interesting ways. For example, a working family might pawn tools on Saturday to redeem Sunday clothes which would then be pawned once more to redeem the tools for Monday morning. That said, for others, a visit to the pawnbroker was a very rare occurrence. A certain George Parrott of York pawned a silver watch at George Fettes’ pawnshop in August 1777 and only redeemed it almost seven years later in May 1784.
Parrott would have had to remember where he placed his ticket. In exchange for leaving collateral with a pawnbroker, the borrower received a ticket which would entitle him to receive his collateral by repaying a loan. Customers would occasionally insist that they receive separate tickets for each item pawned, even if they were pawning items together, to ensure they would be able to redeem them one at a time, if desired. This would usually be accommodated by the pawnbroker, albeit at an extra charge to the borrower. Curiously, there was also a trade in these tickets where a borrower may sell to someone else the right to redeem the collateral they had placed with the pawnbroker.
There were attempts to create alternatives to ordinary pawnbrokers for those in need of temporary assistance. Earlier in the century, a company known as the Charitable Corporation was founded in London. Established in 1707, the Charitable Corporation assisted the poor by offering lower interest rate loans. In some aspects of its actual operations, the company functioned simply as a large-scale pawnbroker. However, it was not to last. The Charitable Corporation collapsed in 1731, largely due to financial improprieties.
Banks were not a substitute to pawnbrokers because only the latter, in sharp contrast to banks, lent to a wide swath of society. Of course, consumers could also receive credit from shopkeepers and other types of moneylenders. However, partly because there were so many of them and the terms of their lending were not the most unfriendly, pawnbrokers were nonetheless a convenient option. They were less judgmental than friends and family and were less exploitive than the other creditors that would consider lending to poorer borrowers.
If a working person failed to find a source of credit on which to rely during lean times, they might be forced to rely on charitable assistance. Perhaps the most relied upon form of this aid was that provided by local parishes in the form of workhouses. These were a source of aid that only attracted the truly destitute though, partly due to the criteria established by parish officers to restrict the number of people seeking assistance. Paupers entering a workhouse occasionally had to give up their personal possessions as a condition to entering.
Pawnshops were much more likely to be relied on by the poor than the workhouses and perhaps kept some from resorting to the latter. In the case of 1770s York, whereas perhaps 5% of the town’s population received parish relief, 15% or more made use of George Fettes’ pawnshop on at least one occasion. It was a local institution of some importance.
For centuries, they may have been blamed for usury and facilitating various vices. Still, partially due to their appeal over alternatives, pawnbrokers were nevertheless amongst the most relied upon sources of consumer credit in 18th century Britain and also amongst the oldest around. Though they may have served all besides the most destitute, it was the poor who relied on pawnbrokers most. Their importance to their communities, however loathed by some, made them the focus of 18th century financial regulations. Nonetheless, it was not one-sided and pawnbrokers were also increasingly tolerated and even protected as time progressed. Even to their foes, their significance to poor borrowers couldn’t have been ignored forever.
More from the Tontine Coffee-House
Read about the gradual abolition of usury restrictions in England and the monti di pietà, charitable pawnshops that sprouted up in Italy in the 15th and 16th centuries. Also, consider subscribing to this blog’s newsletter here.
1. Brealey, Peter. “The Charitable Corporation for the Relief of Industrious Poor: Philanthropy, Profit and Sleaze in London, 1707-1733.” History; The Journal of The Historical Association, vol. 98, no. 333, 2013, pp. 708–729.
2. Hoppit, Julian. “Attitudes to Credit in Britain, 1680–1790.” The Historical Journal, vol. 33, no. 2, June 1990, pp. 305–322.
3. Swain, Warren, and Karen Fairweather. “The Legal Regulation of Pawnbroking in England, a Brief History.” Consumer Credit, Debt and Investment in Europe, pp. 142–159.
4. Tomkins, Alannah. “Pawnbroking and the Survival Strategies of the Urban Poor in 1770s York.” The Poor in England 1700–1850, 2003, pp. 166–198.