Ломбард Червонец

     Historical development of pawnshops

     Pawnshop is the oldest financial institution of humanity and it has a rich history. The first written allusion of Greek and Roman chroniclers about pawnshops evidences of their existence in ancient China more than 3,000 years ago.

     In modern conception, pawnshops appeared in Europe in the Middle Ages. Because of the difficulties in the economy and the problems of the banking system more pawnshops began to appear. Natives of the Italian province of Lombardy founded the Lombardi House in France and England, which owned a chain of lending and mortgage institutions throughout the Europe. In Russia this name became a common name. Even royal families were the customers of Lombardi Houses, for example the King of England Edward III. Spanish Queen Isabella pledged the brilliant crown in pawnshop in order to finance Columbus' trip to America. The image of 3 gold balls was the symbol of Lombardi House, which has been a universal trademark of pawnshops around the world and to the present day, but for some reason it couldn’t expand to Russia. The first attempts of states to organize pawnshop institutions refer to the beginning of the XVII century. Ancestors in this direction are England and Belgium.

     In Russia, the first steps to provide the population with loan refer to the reign of Anna Ioanovna, when in 1729 she ordered the coin office to issue loans on security of gold and silver at interest.

     At Elizaveta Petrovna, a Loan Bank was established, whose duties included issuing loans on security of precious mortgages.

     In 1772 St. Petersburg and Moscow loan treasuries were opened. These institutions were state-owned pawnshops.

     With the development of capitalist relations private and joint-stock pawnshops began to appear again. The period of prosperity of such kind of institutions in each country associated with the activation of market relations. In Russia, private pawn shops appeared in the late XIX century.

     The greatest development pawnshop activity in Russia falls on prewar and war years of the First World War. If in 1904 there were 12 joint-stock pawnshop, 77 urban and municipal pawnshop in Russia, than by 1916 the number of joint-stock pawnshops increased by 92%, urban - 42%, and state-owned pawn shops remained in the same number.

     With this, the first largest capital was private capital - 53.8%. The growth rate of capital of private pawnshops for the aforementioned period was 99.1%. The represented data shows that private joint-stock pawnshops developed most actively, and private capital was mainly in such capitals as St. Petersburg and Moscow.

     Private pawnshops had incomparably more favorable working conditions in comparison with state and municipal pawnshops, as they discovered the opportunity to raise capital by issuing shares, which ensured work of pawnshops using mainly own funds at minimum attraction of borrowed assets. Municipal and state-owned pawn shops mainly worked on borrowed assets. It so historically happened that the state-owned and municipal pawnshops worked unstable due to lack of funding and lack of cash.

     The October Revolution in Russia has stopped the development of private enterprise in the pawn business. On 14 December 1917 a decree on the nationalization of the entire banking was issued, followed by a series of orders for certain types of credits. In 1919, Petrograd and Moscow loan treasuries were eliminated, city pawnshops were liquidated by order of the local authorities, and private pawnshops shared the same destiny for the elimination of private commercial banks.

     Urban pawnshops reopened in Russia only in 1922. During their 70 years of monopoly existence in the USSR, a negative image of pawnshops was formed: huge lines, paltry loans. Excess of demand over supply and lack of interest of employees in the quality of work generated a gross dismissive attitude towards customers.

     With the beginning of restructuring in Russia, an interest of private capital to pawn business renewed. Growth of pawnshops in the number and increase of competition led to a higher quality of service. Modern pawnshops - are high-tech facilities, equipped with various machines, aspiring to be highly competitive with banks in sphere of customer service. Sociological research shows that over the last 3 - 4 years, the attitude of population toward pawn institutions in Russia conspicuously improved.

     Pawn institutions currently exist throughout the world and, not surprisingly, particularly prevalent in countries with a strong economy and a high standard of living. For example, in the U.S. there are more than 16,000 licensed pawnshops, and about 3,000 pawnshops in Australia. Public pawnshop systems remain only in developing countries with totalitarian regimes. For example, in Indonesia there is only one system of pawnshops. This system includes more than 500 offices across the country and belongs to the government.

     History of development and current state of pawn industry in the world shows that pawnshops still have great prospects and play an important role in the economy of any country.

PAWNSHOPS IN OTHER LANGUAGES

English... pawnshop, pawnbroker
Lithuanian... lombardas
Bulgarian...sobstvenik na zaiozhna kyshta
Czech... majitel zastavamy
Danish... pantelaner
Dutch..lommerdhouder; pandjesbaas
French... preteur sur gages
German... Pfandleiher
Portuguese... prestamista sob penhor
Spanish... prestamista sobre prenda, sacaprendas
Estonian... pandimajapidaja
Finnish... panttilainaaja
Polish... wlasciciel lombardu
Swedish... pantbelaning
Mexico... Monte de Piedad

 



 

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