Pawnbrokers

A pawnbroker is a licensed dealer who lends money on personal property at a regulated rate of interest. If the loan is not repaid in the agreed-on time, the pawnbroker has the right to take possession of the item and sell it. Although pawnbrokers may not be viewed on the whole as taboo, they are, and have been, a necessary fixture of a deviant subculture of American society. Before any laws were established to regulate the industry, pawnbrokers served the credit needs of low-income households, criminals, and those with gambling addiction or other vices. Many of the transactions of pawnbrokers and their clients stigmatized the occupation as deviant—a stigma that still holds true today regardless of the new regulations placed on them.

Early pawnbrokers in America lent to individuals who could not obtain a loan from a bank because these prospective borrowers were deemed high risk due to their low income. Pawnbrokers of the 17th and 18th centuries were not regulated by any governing body, and they could charge a customer an interest amount well above that of the banks. However, individuals in dire need of quick, short-term loans were able to obtain them by pawning assets, such as cattle, plows, and clothing. Tavern owners and innkeepers also became pawnbrokers in a sense, allowing patrons to pawn items and receive money in exchange for the opportunity to continue drinking. Proprietors of these establishments not only made money by way of interest but also on the sale of alcohol. In the early 19th century, government officials began receiving complaints about these tavern activities and shut down many of them because of a belief that men should not be borrowing money and spending it on alcohol. Rather, they should spend on the needs of their family. Pawnbrokers were viewed as a means for individuals to continue their self-destructive behaviors.

The many complaints received by the government gave rise to the visibility of pawnbrokers and began the implementation of the stigma placed on pawnbrokers. Pawnbrokers had increased their visibility [Page 489]by relocating their shops to areas that had the possibility of offering countless business opportunities by way of low-income households. With the increase in pawnbrokers and the increasing visibility and stigma placed on them, the government passed regulations to help impede the growing industry. The eventual model used to control the dealings of pawnbrokers was passed in 1812 by the New York City Council. The ordinance required pawnbrokers to pay a $50 fee and apply for a license and to keep records of all transactions and a description of all patrons, and it no longer allowed pawnbrokers to conduct business with minors or slaves. Hence, the government was able to oversee business deals between legitimate pawnbrokers and society. However, not all pawnbrokers chose to conduct business within the watchful eye of the government and found ways to circumvent the regulations placed on them.

When pawnbrokers chose to operate so as to avoid government surveillance, it was often because the business conducted was criminal. Some pawnbrokers became the primary means for the selling of stolen property by burglars. Pawn tickets have often been found on the arrest of suspects in these crimes, linking the pawnbroker to criminals. The knowledge that criminals were able to steal items and have the items resold through a pawnbroker or his establishment added to the stigma already placed on the pawnbroker. Many believed that the locations of the pawnbrokers' establishments encouraged criminals to commit crimes of theft in hopes that they could sell the stolen goods through the more accessible pawnbrokers. With an increase in links between criminals and pawnbrokers, the government, beginning in the 20th century, sought to obtain more control over the industry and establish a need for regulations that would impinge on pawnbrokers across the country.

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