Tssagist. THE PAWN-SHOP.

Waikato Times, Volume XIX, Issue 1577, 12 August 1882, Page 6

Tssagist. THE PAWN-SHOP.

The recent movement which was so general in all our large cities toward the oiderly and economic organisation of the abundant charity, both public and private, for aiding the poor, and especially tho tendency it displayed of a growing dihfcriiijt of mere alms-giving as bomg 1 at best an injudicious and temporal y palliative, together with the increasing conviction that it is possible to permanently improve the condition of tho poor only as they aro taught tho &clf-respuct of independenco, «nd furnished with the means of becoming so, suggest the following social study of tho pawn-shop, as it is and as it might bo made. No one, bo he poor or rich, can expect that his entire lifo shall be passed with such an exceptional freedom from the common lot of mankind that he shall never experience at any time the need cf some temporary assistance, and especially is this need felt by tho poor from the very fact of their povoity. The only institution regularly constituted in society fisyetfor meeting this need is tho pawnshop. In Fiance, in Italy, and elsewhere in Europe, the Mont-de-Pioto, as it is called, is an institution suppoited by the funds of the state and operated under public control. It is thus always abundantly supplied with the means it needs for carrying 1 on its business, never taking advantage of a ploa of its own poverty to incicnsu its gains, or to lesson the aid it can give to those who require it ; and while the late of interest charged is loav, the piofits of the business, if they prove excessive, return to the state itself, for the benefit of the public from which they wcig originally diawn. In Paris, for svaniplo, so admirably is the Mont deL'ieto organized, so thoroughly respectable ue all its sui foundings, that there is no social obloquy connected with its use, and tis a veiy general custom for persons in iasy circumstances to deposit in the >piing their furs and winter clothing with t, ledeoming them when the winter ;omes, and they want them again for their personal use. Jn this way they are ceriiiin to escape the risk and bother of guarding them from the ravages of moths luring the summer, while having the use )f the money advanced upon them, at iiich a reasonable interest as makes the ipevation an advantageous one to both )aitics. The poor find this institution ihcir best fi iencl to apply to when they lave urgent need for a small loan, nor is ilicir self-respect hurt in making ap>lication ; they arc the chief supporters •f the institution ; it is organized for iheir benefit, and /they feel that they have i light to use it. There is no more air if a furtive transaction in visiting it for cgitinnite puiposcs of business than there s here in entering a public post-office to my a postage stamp. There is no need to particularize con:crning the difference between such an nstihition and the pawn-shops vhose three balls arc so increasing cattered over the poorest sections of ,il the cities of this country. As a matter >f social history, it U singular, too, that )awn-brokinpr should have sunk to so ow a level, both here and in England, i' hen a\ c remember that one of the chief nducements put forward in the original irospectus for the establishment of the Jank of England was that it would egularly engage in the pawning business, >eing ready at all times' to advance easonably on such silver-plate and other )ersonal property as its customers should leposit with it, charging for this> lonvenience a much less rate of interest;* :hau tbe gold and' bilvcv'-&niiths of the iine, "who had the monopoly of thisc msiuess, >vere in , the habit' of charging, iut to-day,^ io mortgage ' one'd bouse; io'nypp^iebatp^on.eJs - b|onds,,'/to\geti jib* id vahoe, upon "" bne'jst, stpifag'e' . receipts s on < >ne's .'J}ills ! {V of J.lea'dmgV 'As, 'a business >pera.tion "as'Vespectable 'as-it. is •1"1 ' ''•i-" l^' " f ""' *•*' > Hflt^'U:' > Vi %"" v^^vfiipp'

by the fact that the legal rate of interesi allowed the pawnbrokers in our larg( cities is six per cent a month, or seventy two per cent a year. Among all the cities of the country, Boston, Massachusetts, is the only on< in which any attention has been giver to this wholly unnecessary burden placed upon the poor, and where a propei consideration of the subject has led to a practical reform. Several years ago a few rich men in that city, recognizing the importance of organizing pawnbroking in an orderly business way subcribed a capital of one hundred thousand dollars for the establishment of a Pawners' Bank as it was first called. This name was soon changed to that of the Collateral Loan Bank, the change being made in deference to the prejudice against the use of the word" pawner." By the terms of its charter the bank was allowed to charge on its loans one and a half per cent, a month, or eighteen per cent, a year. The dividends to the stockholders were limited to eight per cent., and all excess of profits after the payment of expenses was to be spent in the free distribution of coal to the poor during the months of December. January, awl Febuary under the supervision of the ToAvn Council. The business has been found so large as to justify the increase of the capital ; and in their reports the managers of the bank reiterate the statement that the business is one of the surest there is, the security being m all cases promptly redeemed. A very large proportion of the loans arc made for sums less than a dollar, while borrowers, upon the payment of the interest are so astonished at the smallness of this charge that they constantly offer to pay more. The bank, while paying to its stockholders their regular dividends of eight percent., has reduced the cost of pawning to those requiring this aid, and at the same time raised the compensation of those who attend to the rate they at first were paid. Thus all the various classes who are connected with the bank have been benefited. But excellent and unquestionable as arc the benefits this application of intelligent sympathy for the poor has produced in the organization of pawning, yet it is evident that it is not all that can bo done in this direction by a further application of the same principle to the economic study of their condition. Why would it not be possible to combine with a pawners' bank a savings-bank, so that these two institutions should work harmoniously together to their common end — the improvement of the hard conditions of the poor? The very necessity of security to-day forces the savings-bank, which gathers its funds from the poor, to limit its investment of them to such securities as pay but the smallest interest. But the pawners' bank offers, as experience has shown, an exceptionally safe opportunity for the investment of large aggregate sums of money at exceptionally high rates of interest. Though eighteen per cent, a year, or one and a half per cent, a montb, is evidently ruinous to the ordinary transactions of business, yet, it is only a fourth of seventy-two per cent., which is the regular charge for pawnbroking in all our cities. A pawners' bank, therefore, the capital of which was conttibuted by the rich, who would be contented with a small interest upon their investment, could induce the poor to deposit their smnll savings with it by the secure promise of a higher rate of interest than they can got now. The details of such a plan could be easily worked out if the task were undertaken with an intelligent and heart-felt sympathy with the purposes it should propose and the results it sought to gain, the essential idea of the scheme being 1 that ifc would enable the poor to lend their savings to the poor. 7T,,vn*>.\ lfn.,/7,/./