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Noxious or neighborly?

"Noxious or neighborly?" Continued...

On New York City's Amsterdam Avenue, amid a residential neighborhood with markets and delis, a huge CVS, a Dunkin' Donuts, and a local gelateria, stands a 5-foot-high black-and-white sign that proclaims, "Lincoln Square Pawn, LOAN, WE BUY GOLD & DIAMONDS." The shop's front room twinkles with gold and diamonds. The white walls gleam with rows of polished guitars hanging like trophies, and the sales team dresses in black business suits.

Daniel, the manager of this third-generation pawnshop that has been under the same ownership since 1946, has wrinkles on his face and cropped salt-and-pepper hair. He smiles when a customer approaches, but dust and scratches on the screen make it hard to see his face, so customers often lean in until their noses almost touch the glass that separates buyer and seller.

He explains to newcomers the process of pawnbroking-then sometimes explains it again, slowing his words when the customer doesn't understand. The store sends three reminder letters and holds things eight months longer than the legal minimum to encourage clients to reclaim their items. In a city like New York where competition is fierce, pawnshops like Lincoln Square Pawn have to work to retain customers-and those who get their items back are more likely to pawn again.

When one customer wants to sell her gold necklace, Daniel eyes the gold chain hanging around her neck and says, "That doesn't seem to be worth much. It looks really light." He agrees to test the value of the customer's jewelry, then weighs and tests the purity of the gold, then meticulously examines the stones with a backlight. "Yeah, sorry, the most I can give you would be $20," he says, slipping the necklace back.

Pawnbrokers in America have been saying "the most I can give" since colonial days, as historian Wendy Woloson (In Hock, U. of Chicago Press, 2009) notes. Nineteenth-century records show one item in pawn for every man, woman, and child living in New York City. On one typical day, Aug. 21, 1838, pawnbroker John Simpson took in 130 pieces of collateral at his pawnshop at 25 Chatham Street, close to where Madame Restell, who became New York's most famous abortionist, plied her trade.

Simpson gave $2 for an accordion, 50 cents for a pistol, 25 cents for eyeglasses, $1 for a music box, $3 for a quilt, $4 for a violin, and $18 for a gold watch chain and key. (Multiply those amounts by 100 to get a rough sense in 2012 of the dollars and cents.) Pawnbrokers throughout the country made similar offers: Ulysses S. Grant pawned his gold watch and chain in 1857 for $22.

Although some early 19th-century reformers wanted to outlaw pawnshops, most acknowledged that pawning-"banking for the poor"-had a necessary role in an urban economy. In 1838, an association of 17 Philadelphians asked the Pennsylvania state legislature for permission to establish a pawnshop that would make small loans on materials goods. They argued that pawnshops gave the "necessitious poor relief of the most valuable kind, enabling them in Seasons of difficulty to provide funds for their immediate Support and in many instances preserving themselves and families from utter ruin."

As Woloson relates, those Philadelphians did not succeed, nor did a proposal in 1848 to establish a Benevolent Loan Institution for the City of Brooklyn. But in 1849 Hunt's Merchants Magazine, a leading business journal, observed that pawnshops were necessary but some pawnbrokers took advantage of "the neediest of the needy." The magazine supported the establishment of reduced-cost pawnshops that would "increase the power of the poor to help themselves."

The Chattel Loan Company in Philadelphia (1855) and the Pawners' Bank of Boston (1860) were the next two compassionate conservative attempts-and the Boston venture worked. It allowed customers to redeem their goods by paying 1.5 percent monthly interest rates. The Pawners' Bank was still in business in 1893, when a business crash put new pressure on charitable groups and the most famous benevolent pawnshop, the Provident Loan Society of New York City (see page 76), began to operate.

Erica, 25, her dark wavy hair pulled back in a ponytail, sits behind thick glass at N. Simpson Pawnbrokers at 149 Canal Street in lower Manhattan. (Simpson is such a famous name in pawnbroking that the Saturday Evening Post in 1937 asked its readers, "Is Your Watch at Simpson's?") Across the street from the pawnshop, jewelry shops glitter with gold and silver necklaces encrusted with diamonds, but at N. Simpson the only decoration is a 19th-century gold scale that gathers dust on top of a filing cabinet.

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