Growing up, I always heard my father’s family’s business referred to as jewelry and/or china dealers; I don’t recall them being described as pawnbrokers. Maybe I just wasn’t listening (quite likely), or maybe that’s how my father explained it when I was too young to understand what “pawnshop” meant.
Anyway, I never thought of them as pawnbrokers. My image of a pawnbroker was based on what I saw on crime shows on television, in movies like The Pawnbroker, and through windows as we drove through poor neighborhoods in New York. The pawnshop was a place for either desperate people in need of money or criminals fencing stolen goods. The pawnbroker was someone who was thus taking advantage of someone’s misfortune or the willing or unwitting participant in a crime. I know of two incidents where my ancestors aided the police in solving crimes, so I am hoping that they were not complicit in receiving stolen goods, but were they taking advantage of the misfortunes of others? Was this just a stereotype promoted in popular culture? Were pawnbrokers actually parasites, usurers, or were they providing a much needed service?
Interestingly, I had not really focused on this as I was researching until I could not decipher a word on the 1910 census for Joseph Cohen’s occupation, as I posted earlier this week. I had asked for help here and elsewhere to decipher the word. Several people expressed the same opinion—that the word is “loan office.” As one person commented, it was just a nicer term for a pawnbroker. Joseph may have been attempting to convey a less controversial image of his occupation.
I decided to do some reading to see what I could learn about pawnbrokers. First, I wanted to better understand how the pawn business works. I know that there are now a few reality television shows based on pawnshops, most notably Pawn Stars. (One of my students brought this up in class this year during a discussion of bailment contracts, and I was sure he had said PORN Stars. Just shows how uncool I can be….) I read a few definitions and websites online about how pawning works, and this one seemed to be fairly accurate and concise, from Dictionary.com: “a dealer licensed to lend money at a specified rate of interest on the security of movable personal property, which can be sold if the loan is not repaid within a specified period.”
Wikipedia has a more expanded definition: “If an item is pawned for a loan, within a certain contractual period of time the pawner may redeem it for the amount of the loan plus some agreed-upon amount for interest. The amount of time, and rate of interest, is governed by law or by the pawnbroker’s policies. If the loan is not paid (or extended, if applicable) within the time period, the pawned item will be offered for sale by the pawnbroker. Unlike other lenders, the pawnbroker does not report the defaulted loan on the customer’s credit report, since the pawnbroker has physical possession of the item and may recoup the loan value through outright sale of the item. The pawnbroker also sells items that have been sold outright to them by customers.”
So a person who needs money but for some reason cannot obtain a bank loan—insufficient credit, time pressure, some other reason that makes a bank an impractical choice—can take their property—jewelry, household items, clothing, whatever—to the pawnshop; the pawnbroker assesses the value of the items and provides a loan of cash to the person who agrees to pay with interest within a set period of time or to forfeit the personal property.
Since the pawnbroker must be licensed and since there are numerous state and federal regulations that apply to the business, there is nothing inherently shady about this business. It is a legal method of loaning money to those who choose not to go to a traditional bank. So why is there an aura of shadiness often associated with the business?
Wendy A. Woloson wrote a book entitled In Hock, Pawning in America from Independence through the Great Depression (2006) that addressed just this question. She wrote:
Pawnbrokers were at once essential to the continued well-being of this economic system and important scapegoats for the various social ills that the financial difficulties it brought. Loans from pawnshops supplemented substandard wages, enabling workers to continue to feed their families and producers to continue to exploit their workers. Although industrialists indirectly benefited from the services pawnbrokers provided, it was also in their interest to encourage the idea that pawnbrokers were fringe operators whose business had no place in the “mainstream” economic system. (p. 21)
Woloson contended that these capitalists promoted an image of pawnbrokers as hard-hearted, greedy and criminally inclined foreigners who used shady practices to exploit their customers. She also asserted that there was a fair degree of anti-Semitism behind these stereotypes. Although not all pawnbrokers were Jewish, many were. As Woloson explains, “Jews’ involvement with pawnbroking resulted not from any inherent character flaws or moral failings, as the popular press often posited. Rather, they took up pawnbroking and like occupations largely because they were barred from other trades, especially the mechanical and artisanal, and so necessarily developed an acumen dealing in consumer goods as peddlers, used clothing dealers, and auctioneers.” (p. 71)
Of course, the negative stereotype of the Jewish moneylender is far more ancient than 19th century America; Shakespeare’s character Shylock from Elizabethan times is evidence of the way society and popular culture have long depicted Jews who were involved in the lending business. Woloson elaborated on the role this stereotype and the anti-Semitism in society in general had on the popular assumptions about pawnbrokers—that they were Jewish opportunists taking money from hard working Americans. (pp. 21-24)
Pawnbrokers were aliens in a commercial world populated by supposedly moral and upright Christian entrepreneurs, and the very nature of the business set it apart from ‘normal’ economic dealings. The antithesis of merchants, pawnbrokers doled out money instead of taking it in, profiting from customers who lacked capital rather than possessed it. (p. 29)
As Woloson wrote, “Jews’ affiliation with pawnbroking and affiliated trades, such as dealing in used clothing and auctioneering, created among them a cohesive, commercially defined group; yet it also reinscribed outsiders’ perception that they operated beyond the currents of mainstream trade.” (p. 25-26) Woloson explained that since most Americans in the early 19th century did not know many Jews, their preconceived image of the Jew as a greedy moneylender was reinforced by the fact that many pawnbrokers were Jewish. “It mattered little whether or not individual pawnbrokers were Jewish. Because they were all assumed to be, people scrutinized their business practices and questioned their ethics.” (p. 26)
Even as many Jews achieved substantial economic success through other businesses and finance in the 19th century, there was a common assumption that they had done so illegally, and the stereotype of the greedy, heartless moneylender persisted as part of popular culture. (p.28) Pawnbrokers became common stock characters in works of popular culture, further promoting the negative and anti-Semitic stereotypes; Woloson catalogs a number of examples of novels and plays using such characters based on this stereotypes (pp. 28-53).
Woloson then provides evidence that in fact pawnshops served important public functions and were set up in ways to prevent exploitation of those who used their services. She describes how as cities grew and people outside the wealthy classes needed access to cash on short notice—to pay taxes or acquire assets they need to live or to work, there was a need for the services of pawnbrokers. In the early 19th century, cities began to adopt regulations for pawnbroking. I saw many legal notices in the Philadelphia Inquirer announcing the issuance of pawnbroking licenses to my ancestors and others. These required the posting of an expensive bond and thus ensured a commitment by the pawnbrokers to run their businesses in compliance with the regulations. (pp. 54-57)
These local regulations controlled both the interest rate a pawnbroker could charge and the period a pawnbroker had to wait before the customer’s goods would be forfeited to the shop and available for sale. For example, in Philadelphia in the 1860s, the interest rate could not exceed 6% and the pawnshop had to hold collateral for a year before reselling it. (p. 58)
Pawnbrokers hoped that this would add some legitimacy to their business and to their image, but apparently that did not occur. As Woloson wrote:
Pawnbrokers were hardworking people who offered what was fast becoming a necessary service in maturing American cities, providing short-term loans on modest forms of collateral. Yet their profession, like dogcatching, was not one that people aspired to. Unlike clerks and mechanics, who received education through apprenticelike training and shared social activities, pawnbrokers enjoyed neither professional prestige, identity, specialized education, nor occupational camaraderie. (p. 58)
According to Woloson, most pawnbrokers learned the trade by starting out as general dealers in goods, learning how to assess the value of those goods. This is consistent with the experience of my ancestors. First, they sold used goods and then perhaps newer goods, including china and clothing primarily. Then they became pawnbrokers. “A lasting and successful career in pawnbroking rested on one’s ability to identify local market niches and to accurately appraise a miscellany of goods.” (p. 60)
In Woloson’s opinion, these pawnbrokers provided substantial benefits to the people and the cities they lived in. The money borrowed from the brokers helped not only their customers, but the economy of the city by enabling those people to buy goods and services and thus support local businesses.
She also discusses the typical patterns of the pawnbroking business in various cities, including Philadelphia. Woloson noted that pawnshops tended to locate in areas that sold used clothing and furniture and other second hand goods rather than in the commercial heart of the cities where more elite retail centers would be located. In Philadelphia, that meant that most pawnshops were located either north or south of the center of the city in areas, for example, like South Street where my great-grandfather’s pawnshop and home were located for many years. Woloson provides this insightful description of that neighborhood in the mid-19th century:
Unburdened by any systematic police control, the diverse population and its many activities brought a liveliness to these areas. The very rich and the very poor mingled freely, as did members of various ethnicities and races. While this social mixing may have been scandalous to outside observers, residents themselves shared the collective ambition of getting ahead. The neighborhood’s mixed population at midcentury engaged in many enterprises. They drank, whored, pilfered, and occasionally rioted their way down South Street. By 1839 there were at least sixty-two taverns in the ten-block area.39 Men had their pick of brothels. …. Some back alleys harbored “houses of prostitution of the lowest grade, the resort of pickpockets and thieves of every description.” Strangers were “earnestly admonished to not go there.” In contrast, another brothel only a few blocks away was home to a respectable “swarm of yellow [mulatto] girls, who promenade up and down Chestnut Street every evening, with their faces well powdered.” The lower sorts needed pawnbrokers to get them through the exigencies of the day and to fund their debauchery at night. Ten of the city’s thirteen pawnbrokers in 1850 were on South Street or within one block of the corridor. Rooted, the shops continued to hem the southern and northern fringes of the city until the end of the century. (pp. 64-65; footnotes omitted)
This description gave me a far different impression than I previously had about how and where my great-grandfather Emanuel and his many siblings grew up; whereas I had never assumed that this was a wealthy neighborhood, I had assumed it was fairly safe and middle-class since Jacob had servants and a business that supported so many people. Did my great-grandfather grow up hungry? Probably not, but neither did he grow up in some swanky suburb or upscale city neighborhood. He grew up surrounded by thieves, pickpockets, brothels, and bars.
These locations were, in Woloson’s view, business necessities. The people who needed the services of the pawnbrokers were not the wealthy who shopped at fancy stores, but the working class and poor residents who could not get by without a quick and fairly easy loan. Woloson opines that in some ways pawnbrokers were more straightforward businesspeople than those who used sales techniques to manipulate customers into buying goods. In Woloson’s view, “Pawnbrokers made no pretense that they did anything other than loan money, and in this way many may have been more honest professionals than the retailers pushing goods on the other side of the city.” (p. 67-68)
Another pattern observed by Woloson was the tendency of pawnbrokers to expand and pass down their businesses within their families. “Established, successful pawnshops were often passed down through single families rather than being taken over by outside partners; younger generations grew up in the trade and learned from fathers, uncles, and brothers, thus providing steady income to families over generations and contributing to social and economic stability where pawnbrokers resided.” (p. 74)
Finally, Woloson also discusses the relative economic success of pawnbrokers, debunking the myth that many were wealthy as a result of the exploitation of those of lesser means. She wrote:
Like many other businessmen operating in interstitial markets, most pawnbrokers worked the margins. Once they reached their professional apex, they typically did not advance much beyond the class of their customers and failed to accumulate enough capital to invest in larger financial endeavors that would have elevated them socially and economically. A pawnbroker’s profits were tied to the economic fortunes of his customers, and he often suffered losses at auctions of unredeemed collateral, especially during economic crunches. Pawnbrokers running shops in smaller cities necessarily supplemented the lending business with other petty entrepreneurial activities. Average pawnbrokers made enough money to support their families and to keep the business going, but probably not much more. (p. 75)
I am really glad that I found this book because it has really given me a new perspective on my Cohen ancestors. Compared to my Brotman and Goldschlager relatives, I’d always imagined that my Cohen relatives were wealthy and established. Of course, by the late 19th century, early 20th century when my mother’s family started to arrive from Galicia and Romania, the Cohens had already been here for about 50 years and were well-settled, owning their own businesses, speaking English, and American-born. They had the advantages of being here much earlier and so were far ahead economically when my mother’s family arrived. But they were not the wealthy elite; they were probably at most middle class business people who were working in unpleasant neighborhoods, subjected to negative stereotypes based on their trade as well as their religion, and engaged in a business that required some risk-taking and business acumen but was not well-regarded. That must have been very painful and frustrating.
Having this new perspective will help me better understand their lives as I continue to move forward in telling their story.