History of Pawn


It has happened to the best of us, especially in recent years, where we just didn’t have enough money. Whether it is due to an unexpected bill, Christmas is approaching faster than you want, or, for some small businesses, you have to pay your employees.  Typically, the first place to go would be the bank with their never-ending red tape and low chances of approval.

None of these troubles are new. History is littered with this story through all societies throughout all countries. So what has been history’s answer? One of the oldest professions, the pawn shop.

The first recorded pawn transactions took place over 3,ooo years ago in ancient China. These ancient pawn shops were run by Buddhist monasteries with the sole purpose to aid the poor. There are also records in ancient Greece and Rome with the Latin word “patinum,” meaning cloth or clothing. For many of the peasants, the most expensive items they owned were their clothes. When borrowing money, they would have to get a loan on their garments.

Fast-forward a couple thousand years to the origins of modern pawnbroking. In Italy, a pledge system had developed called “monts de piete.” Starting out as a completely benevolent endeavor, they were established by the authority of the popes to lend money to the poor with no interest being charged. The sole condition of the agreement was the lender held onto the collateral. With no interest being charged, there was never any chance these businesses could make a profit and keep their doors open.

The Medici family of Florence found a way around this. Remaining within the confines of the law, they would hold onto the collateral until the owner was ready to pay back the loan. The Medici’s would then sell the item back for more than the original loan amount.

The Pawnbroker’s Sign

The Pawnbroker’s Sign

The pawnbroker’s symbol, or sign, consists of three gold spheres suspended from a bar, and has been in use since at least Medieval times. Historians, and some pawnbrokers, disagree on the true origins of the sign, but there are three theories that stand above the others in popularity.

The first theory involves the Medici family. Before opening their pawn business in Florence, the Medici’s were affluent bankers. With their deep pockets, they had friends in very high places such as politicians, lawmakers and even church leaders.

One legend talks of two Medici brothers. While the one brother stayed in banking, the other split from the formal family business to open his pawnshop. When the two brothers parted ways, they split their family crest. The brother who opened the pawnshop gained the three gold spheres.

The more likely version is as their success continued to grow, others wanted to share in the wealth. The easiest way to do this was to modify their signs, adding the three spheres the Medicis had on display.

Another legend focuses on a province in Northern Italy, Lombardy. Bankers in this province were very successful with the pawnbroking business. They were so profitable, the business model acquired the name Lombard banking. The stories say the Lombard bankers hung three gold spheres outside their homes. The spheres are said to have started out as three gold coins but later changed to spheres to attract more attention.

The third legend focuses on one of the most iconic figures of legend, St. Nicholas. Saint Nicholas of Myra was a Greek Bishop in the 4th century and is the patron saint of pawnbrokers. While there are countless stories of his generosity, the most well-known tells the story of a man in his town who had three daughters. The father could not afford a decent dowry and he feared they would never marry. If his daughters could not marry, they would likely become prostitutes.

In the middle of the night, St. Nicholas dropped a sack filled with gold coins into each daughter’s window, saving them from their impending futures. Those three bags of gold came to represent the gold spheres used by pawnbrokers.

December 6th is International St. Nicholas Day, and also, coincidentally, National Pawnbrokers Day.

Modern-Day Pawnbroking

Pawnbroking has evolved over its long life. Originally founded to help only the destitute of society, the business has evolved into a modern, friendly and convenient way for anyone to get quick

Charlie Chaplin in the 1916 movie “The Pawnshop”

cash. Most shops are well-lit and staffed by friendly, well-kept employees.

With the rise of pawn-related television shows, it has become less taboo to do business with pawn shops as once considered. People are attracted not only by the ease involved with selling items, but the thrill of the negotiation draws many to pawn shops daily.

If you have ever found yourself having to pawn an item, consider yourself in good company. Several notable historical figures have found themselves needing a pawnbroker’s help throughout the years. In 1338, Edward III pawned the crown jewels in order to finance what later became known as the Hundred Years War. In 1415, Henry V also pawned the crown jewels to finance a war. Pope Leo X was regularly pawning palace furniture, table plates, jewels and even statues of the apostles in order to pay for his spending habits.

Probably the most famous, or infamous, pawn transaction came by the hands of Queen Isabella of Spain. While most believe she pawned her crown jewels in order to finance Christopher Columbus’ voyage to the New World, history has proven this to be impossible. She had already pawned the jewels in order to finance her husband’s war with the Moors.


If you’d like more information about how to pawn your item, please call us at: (775) 332-2863.

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