In Hock: Pawning in Early America

Abstract

In a 1782 letter, Robert Morris broke bad news to Richard Butler, a colonel in Continental army, that he couldn't loan him any money. Mortifying as it is, Morris confided, because of scarcity of cash the Jew Brokers and others have informed me in course of my inquiries that Sub Rosa they frequently get 5 per Cent per month from good for use of Money with pledges lodged for repayment. He added that, before establishment of Bank [of North America] they frequently got ten per Cent and upwards.1Yet Morris's Substantial men were not only ones who found themselves in financial straits. The less economically able-whose capital rested in material possessions rather than large-scale commercial enterprises-also obtained loans by pawning goods, offering up more modest forms of capital as loan collateral. Part of informal economy of seventeenth and eighteenth centuries, pawning was something people resorted to when they needed cash but didn't have it, when tax bills came due or accounts had to be settled by something other than paper currency. Neighbors often offered a horse, plow, or similar piece of capital as collateral in exchange for a short-term loan. Innkeepers, who had ready cash and access to a diverse and mobile clientele traveling with all manner of personal belongings, also became de facto pawnbrokers in eighteenth century.2While ability to secure small, short-term cash loans by pawning personal goods was an important economic survival strategy for early Americans, it was a practice that has been largely overlooked by scholars, who have typically aimed their sights on more visible (and legitimized) economic activities of merchants, retailers, and farmers. But pawning, which began as one among many kinds of informal (and often undocumented) transactions in early American economy, became, by nineteenth century, an essential way for middling sort to short-term loans.3It is tempting to describe pawning as a activity. Certainly pawnbroker appeared to be a marginal figure operating on fringes of urban areas. And his customers, unconnected to credit economies of merchant elite and constantly living on financial margins, needed someone like pawnbroker. Pawning, in fact, was anything but marginal. It constituted an essential way to ready cash for everyone but privileged few, and was therefore a mainstream economic activity. The small, short-term cash loans provided by pawnbroker supplemented laborers' insufficient wages, buttressing industrial capitalist system within which they operated. Yet a specious distinction separating from mainstream, drawn in their own interests by early republic's privileged and wealthy (the ones who did not want to acknowledge inequities of early American capitalist economy) then held sway, and continues to shape scholarly analysis.An appreciation of shifting nature of pawning and pawnbroking in America from late eighteenth century to antebellum era requires an understanding of workings of process and roles played by main actors: pawners and pawnbrokers who participated in transactions, and their critics, whose increasing anxiety about pawning reflected broader anxieties about emergent capitalist system and its effects on their notions of traditional American society.The first reference to pawnbrokers in America complained that they enabled people to waste money. The Minutes of Court of Burgomasters and Schepens, regarding Dutch settlers in 1657, documented concerns brought to magistrates of New Netherland colony against many tapsters and tavernkeepers who profited from money that drinkers should have instead been spending on their families. Moreover, when their customers' cash was gone, offending proprietors accepted furniture, clothing, and other goods in pawn, enabling their clientele to obtain means of continuing their usual drinking bouts. …