History of Pawnbroking - Switzerland

Switzerland

The fate of pawnbroking in Switzerland appears to be not very dissimilar from that of the Jew who is fabled to have once started in business at Aberdeen. Nevertheless the cantons of Bern and Zürich enacted elaborate laws for the regulation of the business. In Zürich the broker must be licensed by the cantonal government, and the permit can be refused only when the applicant is known to be a person undeserving of confidence. Regular books have to be kept, which must be at all times open to the inspection of the police, and not more than 1% interest per month may be charged. A loan runs for six months, and unredeemed pledges may be sold by auction a month after the expiration of the fixed period, and then the sale must take place in the parish in which the article was pledged. No more than two persons at a time have ever been licensed under this law, the business being unprofitable owing to the low rate of interest. In the canton of Bern there were once two pawnbrokers. One died and the other put up his shutters. The Zürich cantonal bank, however, conducts a pawnbroking department, which lends nothing under 4s. or over £40 without the special sanction of the bank commission. Loans must not exceed two-thirds of the trade value of the pledge, but 80% may be lent upon the intrinsic value of gold and silver articles. The establishment makes practically no profit. The Swiss disinclination to go to the pawnshop is, perhaps, accounted for in some measure by the growing number of dealers in second-hand articles, to whom persons in want of ready money sell outright such things as are usually pledged, in the hope of subsequently buying them back. Since, however, the dealer is at liberty to ask his own price for repurchase, the expectation is often illusory, and can usually be fulfilled only upon ruinous terms.