History of Pawnbroking - Holland and Belgium

Holland and Belgium

The borrowing of money on the security of goods deposited has been the subject of minute regulations in the Low Countries from an early date. So far back as the year 1600

The archdukes Albert and Isabella, governors of the Spanish Netherlands under Philip III, reduced the lawful rate of interest from 32 3/4 to 21 3/4%; but since extortion continued they introduced the mont de pit in 1618, and, as we have already seen, in the course of a dozen years the institution was established in all the populous Belgian towns, with one or two exceptions. The interest chargeable to borrowers was fixed originally at 15%, but was shortly afterwards reduced, to be again increased to nearly the old level. Meanwhile various towns possessed charitable funds for gratuitous loans, apart from the official institutions. Shortly after the mont de pit was introduced in the Spanish provinces, the prince-bishop of Liège, Ferdinand of Bavaria, followed the example set by the archdukes. He ordained that the net profits were to accumulate, and the interest upon the fund to be used in reduction of the charges. The original rate was 15%, when the Lombard money-lenders had been charging 43; but the prince-bishops monts de pit were so successful that for many years their rate of interest did not exceed 5% - it was, indeed, not until 1788 that it was increased by one-half. These flourishing institutions, along with those in Belgium proper, were ruined by the French Revolution. They were, however, re-established under French dominion, and for many years the laws governing them were constantly altered by the French, Dutch and Belgian governments in turn. The whole subject is now regulated by a law of 1848, supplemented by a new constitution for the Brussels mont de pit dating from 1891.

The working capital of these official pawnshops is furnished by charitable institutions or the municipalities, but the Brussels one possesses a certain capital of its own in addition. The rate of interest charged in various parts of the country varies from 4 to 16%, but in Brussels it is usually less than half the maximum. The management is very similar to that of the French monts de pit, but the arrangements are much more favorable to the borrower. The ordinary limit of loans is I2o. In Antwerp there is an anonymous pawnshop, where the customer need not give his name or any other particulars. In Holland private pawhbrokers flourish side by side with the municipal Banken van Leening, nor are there any limitations upon the interest that may be charged. The rules of the official institutions are very similar to those of the monts de pit in the Latin countries, and unredeemed pledges are sold publicly 15 months after being pawned. A large proportion of the advances are made upon gold and diamonds; workmen's tools are not taken in pledge, and the amount lent varies from 8d. upwards. On condition of finding such sum of money as may be required for working capital over and above loans from public institutions, and the caution money deposited by the city officials, the municipality receives the profits.