Page:EB1911 - Volume 20.djvu/1043

Rh advanced by a municipal pawnshop is fixed by an official called the commissaire-priseur, who is compelled to load the scales against the borrower, since, should the pledge remain unredeemed and be sold for less than was lent upon it, he has to make good the difference. This official is paid at the rate of % upon loans and renewals, and 3% on the amount obtained by the sales of forfeited pledges. This is obviously the weakest part of the French system. The Paris mont de piété undertakes to lend four-fifths of the intrinsic value of articles made from the precious metals, and two-thirds of that of other articles. The maximum and minimum that may be advanced are also fixed. The latter varies in different parts of the country from one to three francs, and the former from a very small sum to the 10,000 francs which is the rule in Paris. Loans are granted for twelve months with right of renewal, and unredeemed pledges may then be sold by auction, but the proceeds may be claimed by the borrower at any time within three years. Pledges may be redeemed by instalments.

Somewhere between forty and fifty French towns possess municipal pawnshops, a few of which, like those of Grenoble and Montpellier, having been endowed, charge no interest. Elsewhere the rate varies from nil in some towns, for very small pledges, to 10%. The constant tendency throughout France has been to reduce the rate.' The great establishment in Paris obtains part of its working capital — reserves and surplus forming the balance — by borrowing money at a rate varying from 2 to 3 % according to the length of time for which the loan is made. Under a law passed in 1891 the Paris mont de pi6t6 makes advances upon securities at 6%, plus a duty of 5 centimes upon every hundred francs. The maximum that can be lent in this way is £20. Up to 80% is lent on the face value of government stock and on its own bonds, and 75%, upon other securities; but 60% only may be advanced on railway shares. These advances are made for six months. Persons wishing to borrow a larger sum than sixteen francs from the Paris mont de piété have to produce their papers of identity. In every case a numbered metal check is given to the customer, and a duplicate is attached to the article itself. The appraising clerks decide upon the sum that can be lent, and the amount is called out with the number. If the borrower is dissatisfied he can take away his property, but if he accepts the offer he has to give full particulars of his name, address and occupation. The experts calculate that every transaction involving less than twenty-two francs results in a loss to the Paris mont de piété, while it is only those exceeding eighty-five francs which can be counted upon to be invariably profitable. The average loan is under thirty francs.

The borrowing of money on the security of goods deposited has been the subject of minute regulations in the Low Countries from an early date. So far back as the year 1600 the “archdukes” Albert and Isabella, governors of the Spanish Netherlands under Philip III., reduced the lawful rate of interest from 32 to 21%; but since extortion continued they introduced the mont de piété in 1618, and, as we have already seen, in the course of a dozen years the institution was established in all the populous Belgian towns, with one or two exceptions. The interest chargeable to borrowers was fixed originally at 15%, but was shortly afterwards reduced, to be again increased to nearly the old level. Meanwhile various towns possessed charitable funds for gratuitous loans, apart from the official institutions. Shortly after the mont de piété was introduced in the Spanish provinces, the prince-bishop of Liége (Ferdinand of Bavaria) followed the example set by the archdukes. He ordained that the net profits were to accumulate, and the interest upon the fund to be used in reduction of the charges. The original rate was 15%, when the Lombard money-lenders had been charging 43; but the prince-bishop's monts de piété were so successful that for many years their rate of interest did not exceed 5%—it was, indeed, not until 1788 that it was increased by one-half. These flourishing institutions, along with those in Belgium proper, were ruined by the French Revolution. They were, however, re-established under French dominion, and for many years the laws governing them were constantly altered by the French, Dutch and Belgian governments in turn. The whole subject is now regulated by a law of 1848, supplemented by a new constitution for the Brussels mont de piété dating from 1891.

The working capital of these official pawnshops is furnished by charitable institutions or the municipalities, but the Brussels one possesses a certain capital of its own in addition. The rate of interest charged in various parts of the country varies from 4 to 16%, but in Brussels it is usually less than half the maximum. Tile management is very similar to that of the French monts de piété, but the arrangements are much more favourable to the borrower. The ordinary limit of loans is £120. In Antwerp there is an “anonymous” pawnshop, where the customer need not give his name or any other particulars. In Holland private pawnbrokers flourish side by side with the municipal “Banken van Leening,” nor are there any limitations upon the interest that ma be charged. The rules of the official institutions are very similar to those of the monts de piété in the Latin countries, and unredeemed pledges are sold publicly fifteen months after being pawned. A large proportion of the advances are made upon gold and diamonds; workmen's tools are not taken in pledge, and the amount lent varies from 8d. upwards. On condition of finding such sum of money as may be required for working capital over and above loans from public institutions, and the “caution money” deposited by the city officials, the municipality receives the profits.

Pawnbroking in Germany is conducted at once by the state, by the municipalities, and by private enterprise; but of all these institutions the state loan office in Berlin is the most interesting. It dates from 1834, and the working capital was found, and still continues to be in part provided, by the Prussian State Bank. The profits are invested, and the interest devoted to charitable purposes. The maximum and minimum rates of interest are fixed, but the rate varies, and often stands at about 12%. Two-thirds of the estimated value is the usual extent of a loan; four-fifths is advanced on silver, and five-sixths on fine gold. State and municipal bonds may be pledged up to a maximum of £150, the advance being 80% of the value, and a fixed interest of 6% is charged upon these securities. The values are fixed by professional valuers, who are liable to make good any loss that may result from over-estimation. The bulk of the loans are under £5, and the state office is used less by the poor than by the middle classes. Loans run for six months, but a further six months' grace is allowed for redemption before the article pledged can be sold by auction. The net annual profit usually amounts to little more than 1 % upon the capital employed. The pawnbroking laws of Austria-Hungary are very similar to those which prevail in England. Free trade exists, and the private trader, who does most of the business, has to obtain a government concession and deposit caution-money varying in amount from £80 to £800, according to the size of the town. He has, however, to compete with the monts de piété or Versatzaemter, which are sometimes municipal and sometimes state institutions. The chief of these is the imperial pawn office of Vienna, which was founded with charitable objects by the emperor Joseph I. in 1707, and one-half of the annual surplus has still to be paid over to the Vienna poor fund. Here, as in Berlin, the profits are relatively small. Interest is charged at the uniform rate of 10%, which is calculated in fortnightly periods, however speedily redemption may follow upon pawning. For small loans varying from two to three kronen, 5% only is charged. The Hungarian state and municipal institutions appear, on the whole, to compete somewhat more successfully with the private firms than is the case in Vienna.

In Italy, the “country of origin” of the mont de piété, the institution stiff flourishes. It is, as a rule, managed by a committee or commission, and the regulations follow pretty closely the lines of the one in Rome, which never lends less than lod. or more than £40. Four-fifths of the value is lent upon gold, silver and jewels, and two-thirds upon other articles. The interest, which is reckoned monthly, varies with the amount of the loan from 5 to 7%, but no interest is chargeable upon loans up to 5 lire. A loan runs for six months, and may be renewed for similar periods up to a maximum of five years. If the renewal does not take place within a fortnight of the expiration of the ticket, the pledge is sold, any surplus there may be being paid to the pawner. When more than 10 lire is lent there is a charge of 1% for the ticket. Agencies of the mont de piété are scattered about Rome, and carry on their business under the same rules as the central office, with the disadvantage to the borrower that he has to pay an “agent’s