In a 1782 letter, Robert Morris broke the bad news to Richard Butler, a colonel in the Continental army, that he couldn't loan him any money. "Mortifying as it is," Morris confided, because of the scarcity of cash "the Jew Brokers and others have informed me in the course of my inquiries that Sub Rosa they frequently get 5 per Cent per month from good Substantial men for the use of Money with pledges lodged for the repayment." He added that, "before the establishment of the Bank [of North America] they frequently got ten per Cent and upwards."1
Yet Morris's "Substantial men" were not the only ones who found themselves in financial straits. The less economically able—whose capital [End Page 35] rested in material possessions rather than large-scale commercial enterprises—also obtained loans by pawning goods, offering up more modest forms of capital as loan collateral. Part of the informal economy of the seventeenth and eighteenth centuries, pawning was something people resorted to when they needed cash but didn't have it, when tax bills came due or accounts had to be settled by something other than paper currency. Neighbors often offered a horse, plow, or similar piece of capital as collateral in exchange for a short-term loan. Innkeepers, who had ready cash and access to a diverse and mobile clientele traveling with all manner of personal belongings, also became de facto pawnbrokers in the eighteenth century.2
While the ability to secure small, short-term cash loans by pawning personal goods was an important economic survival strategy for early Americans, it was a practice that has been largely overlooked by scholars, who have typically aimed their sights on the more visible (and legitimized) economic activities of merchants, retailers, and farmers. But pawning, which began as one among many kinds of informal (and often undocumented) transactions in the early American economy, became, by the nineteenth century, an essential way for the middling sort to obtain short-term loans.3
It is tempting to describe pawning as a "marginal" activity. Certainly the pawnbroker appeared to be a marginal figure operating on the fringes [End Page 36] of urban areas. And his customers, unconnected to the credit economies of the merchant elite and constantly living on the financial margins, needed someone like the pawnbroker. Pawning, in fact, was anything but marginal. It constituted an essential way to obtain ready cash for everyone but the privileged few, and was therefore a mainstream economic activity. The small, short-term cash loans provided by the pawnbroker supplemented laborers' insufficient wages, buttressing the industrial capitalist system within which they operated. Yet a specious distinction separating the "marginal" from the "mainstream," drawn in their own interests by the early republic's privileged and wealthy (the ones who did not want to acknowledge the inequities of the early American capitalist economy) then held sway, and continues to shape scholarly analysis.
An appreciation of the shifting nature of pawning and pawnbroking in America from the late eighteenth century to the antebellum era requires an understanding of the workings of the process and the roles played by the main actors: the pawners and the pawnbrokers who participated in the transactions, and their critics, whose increasing anxiety about pawning reflected broader anxieties about the emergent capitalist system and its effects on their notions of traditional American society.
The first reference to pawnbrokers in America complained that they enabled people to waste money. The Minutes of the Court of Burgomasters and Schepens, regarding Dutch settlers in 1657, documented concerns brought to the magistrates of the New Netherland colony "against the many tapsters and tavernkeepers" who profited from money that drinkers should have instead been spending on their families. Moreover, when their customers' cash was gone, the offending proprietors accepted furniture, clothing, and other goods in pawn, enabling their clientele to "obtain the means of continuing their usual drinking bouts." Officials took...