Mont de Piété
Encyclopedia
A mount of piety was an institutional pawnbroker
run as a charity
in Europe
from the later Middle Ages
times to the 20th century, more often referred to in English by the relevant local term , such as monte di pietà (Italian), mont de piété (French), or monte de piedad (Spanish). Similar institutions were established in the colonies of Catholic countries; the Mexican Nacional Monte de Piedad
is still in operation.
and was developed in cities as a reform against money lending, an early form of organized charity
.
The public office was organized and operated by Christian
s and offered financial loan
s at a moderate interest
to those in need. The organizing principle, based on the benefit of the borrower and not the profit
of the lender, was viewed as a lesser evil than money lending. The organization of the Monte di Pietà depended on acquiring a monte
, a collection of funds from voluntary donations by financially privileged people who had no intentions of regaining their money. The people in need would then be able to come to the Monte di Pietà and give an item of value in exchange for a monetary loan. The term of the loan would last the course of a year and would only be worth about two-thirds of the borrower’s item value. A pre-determined interest rate would be applied to the loan and these profits were used to pay the expenses of operating the Monte di Pietà.
Such organizations spread throughout the continent of Western Europe during the Middle Ages
, a credit to the preaching of Franciscan
s and their condemnation of usury
, with later support by both Dominican preachers and humanist
intellectuals of the fifteenth century.
. Between the years 1462 and 1470, an estimated forty more of the same organization were developed. The Franciscan Marco di Matteo Strozzi preached about the benefits of a Monte di Pietà in combating usury. He left a set of memoirs that outlined his goal to rid the city of Jewish money lenders and to replace them with Christian pawn shops which allowed the poor to acquire cheap credit.
, Michael Northburgh
, who left 1000 marks of silver for the establishment of a bank that should lend money on pawned objects, without interest, providing that the expenses of the institution be defrayed from its foundation capital.He had the monies deposited in a chest in the body of St Paul's and directed that if in any case at the end of the year the sums borrowed were not repaid, then the preacher at Paul's Cross should in his sermon declare that the pledge would be sold within fourteen days, if not redeemed forthwith. [Charles Knight's London , 1851, Vol1 p38]. The capital was eventually consumed, and the bank closed.
During the first year of operations, the Monte di Pietà did not grant loans more than twenty-five lire to people who lived in the city and ten lire to people who lived in the rural area five miles from the city. This restriction was expected to increase as more funds were acquired from voluntary and involuntary donations. If a borrower wanted to regain his pawned item, he would have to return the receipt to the massaro. The cashier would then calculate the interest that was earned on the item and the borrower would have to pay the interest in order to redeem their pawn. This interest collection provided one of the sources of revenue for the daily functions, operations, and salaries of the Monte di Pietà .
The Monte di Pietà‘s employees were responsible for keeping track of the daily operations of the organization. Strict regulation dictated both their work and personal life. For example, fines were imposed for improper or dishonest behaviour. The actual space of the "Monte di Pietà was regarded as a pious and religious house" and therefore stage plays, dances, games and other festivities were forbidden.
The employees’ salaries came from the income generated by the interest payments on loans. The massaro earned 120 florins per year, the cashier was paid 80 florins, the massaro’s two assistants received 30 florins each, the assessors received 40 florins each, and the two servants earned 24 florins each.
While some monetary deposits were voluntary, some people had no choice in funding the capital for the “monte”. For example, Monna Margherita da Poppi of 1497 gave 40 lire to the Monte di Pietà as part of her sentence in a legal matter. The Monte di Pietà was in charge of keeping this money from her until she was married. In this case, the organization of the Monte di Pietà was a dowry fund which became popular during the mid-sixteenth century. More revenues for the “monte” were acquired from the state through ordered fines.
Since the purpose of the Monte di Pietà was to combat usury, there were clear guidelines regarding the operations of the organization. For example, the employees had to ensure that all items that were exchanged were free, and therefore the legal property of the person pawning it. Also there were guidelines regarding the kind of items that were permitted, and the amount a person could borrow, both in terms of time and quantity. For example, holy items and unfinished goods such as pieces of cloth were not accepted as pawns for loans.
, agnostic, and government controlled institution established by craftsmen or lesser standing professionals to care for members' needs when disabled or rehabilitating. They operated under a Patron Saint
and in a church or monastery but without any religious obligation (and many had an ephemeral life).
Pawnbroker
A pawnbroker is an individual or business that offers secured loans to people, with items of personal property used as collateral...
run as a charity
Charitable organization
A charitable organization is a type of non-profit organization . It differs from other types of NPOs in that it centers on philanthropic goals A charitable organization is a type of non-profit organization (NPO). It differs from other types of NPOs in that it centers on philanthropic goals A...
in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
from the later Middle Ages
Middle Ages
The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...
times to the 20th century, more often referred to in English by the relevant local term , such as monte di pietà (Italian), mont de piété (French), or monte de piedad (Spanish). Similar institutions were established in the colonies of Catholic countries; the Mexican Nacional Monte de Piedad
Nacional Monte de Piedad
The Nacional Monte de Piedad is a not-for-profit- institution and pawnshop whose main office is located just off the Zócalo, or main plaza of Mexico City. It was established between 1774 and 1777 by Pedro Romero de Terreros as part of a movement to provide interest-free or low-interest loans to...
is still in operation.
History
This fifteenth century institution originated in ItalyItaly
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
and was developed in cities as a reform against money lending, an early form of organized charity
Charity (practice)
The practice of charity means the voluntary giving of help to those in need who are not related to the giver.- Etymology :The word "charity" entered the English language through the Old French word "charité" which was derived from the Latin "caritas".Originally in Latin the word caritas meant...
.
The public office was organized and operated by Christian
Christian
A Christian is a person who adheres to Christianity, an Abrahamic, monotheistic religion based on the life and teachings of Jesus of Nazareth as recorded in the Canonical gospels and the letters of the New Testament...
s and offered financial loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
s at a moderate interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
to those in need. The organizing principle, based on the benefit of the borrower and not the profit
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...
of the lender, was viewed as a lesser evil than money lending. The organization of the Monte di Pietà depended on acquiring a monte
Monte
-Surname:* Philippe de Monte , Renaissance composer* Lou Monte , Italian-American singer-Given name:* Monte Attell , American world champion bantamweight boxer* Monte Irvin -Surname:* Philippe de Monte (1521-1603), Renaissance composer* Lou Monte (1917-89), Italian-American singer-Given name:*...
, a collection of funds from voluntary donations by financially privileged people who had no intentions of regaining their money. The people in need would then be able to come to the Monte di Pietà and give an item of value in exchange for a monetary loan. The term of the loan would last the course of a year and would only be worth about two-thirds of the borrower’s item value. A pre-determined interest rate would be applied to the loan and these profits were used to pay the expenses of operating the Monte di Pietà.
Such organizations spread throughout the continent of Western Europe during the Middle Ages
Middle Ages
The Middle Ages is a periodization of European history from the 5th century to the 15th century. The Middle Ages follows the fall of the Western Roman Empire in 476 and precedes the Early Modern Era. It is the middle period of a three-period division of Western history: Classic, Medieval and Modern...
, a credit to the preaching of Franciscan
Franciscan
Most Franciscans are members of Roman Catholic religious orders founded by Saint Francis of Assisi. Besides Roman Catholic communities, there are also Old Catholic, Anglican, Lutheran, ecumenical and Non-denominational Franciscan communities....
s and their condemnation of usury
Usury
Usury Originally, when the charging of interest was still banned by Christian churches, usury simply meant the charging of interest at any rate . In countries where the charging of interest became acceptable, the term came to be used for interest above the rate allowed by law...
, with later support by both Dominican preachers and humanist
Renaissance humanism
Renaissance humanism was an activity of cultural and educational reform engaged by scholars, writers, and civic leaders who are today known as Renaissance humanists. It developed during the fourteenth and the beginning of the fifteenth centuries, and was a response to the challenge of Mediæval...
intellectuals of the fifteenth century.
In Italy
In 1462, the first recorded Monte di Pietà was founded in PerugiaPerugia
Perugia is the capital city of the region of Umbria in central Italy, near the River Tiber, and the capital of the province of Perugia. The city is located about north of Rome. It covers a high hilltop and part of the valleys around the area....
. Between the years 1462 and 1470, an estimated forty more of the same organization were developed. The Franciscan Marco di Matteo Strozzi preached about the benefits of a Monte di Pietà in combating usury. He left a set of memoirs that outlined his goal to rid the city of Jewish money lenders and to replace them with Christian pawn shops which allowed the poor to acquire cheap credit.
In England
The first institution was started in 1361 by the Bishop of LondonBishop of London
The Bishop of London is the ordinary of the Church of England Diocese of London in the Province of Canterbury.The diocese covers 458 km² of 17 boroughs of Greater London north of the River Thames and a small part of the County of Surrey...
, Michael Northburgh
Michael Northburgh
Michael Northburgh, otherwise Michael de Northburgh , was the Bishop of London between 1354 and his death in 1361.Northburgh occupied the office of Lord Privy Seal between 1350 and 1354....
, who left 1000 marks of silver for the establishment of a bank that should lend money on pawned objects, without interest, providing that the expenses of the institution be defrayed from its foundation capital.He had the monies deposited in a chest in the body of St Paul's and directed that if in any case at the end of the year the sums borrowed were not repaid, then the preacher at Paul's Cross should in his sermon declare that the pledge would be sold within fourteen days, if not redeemed forthwith. [Charles Knight's London , 1851, Vol1 p38]. The capital was eventually consumed, and the bank closed.
Employees
A massaro or massaio had the duty of overseeing the daily interactions between the borrowers that came to the Monte di Pietà and the other employees. If the item was believed to be the legal property of the borrower two assistants called scrivani collected the pawn from the borrower. After examining and recording details about the condition of the object, it would them be passed to assessors who would evaluate the item’s value. The massaro would then make three copies of a numbered receipt that identified the owner’s name, the type of object being pawned, the condition of the object, the object’s value, the amount of the loan and the date. Generally, the loan would not exceed two thirds of the object’s value. The three receipts would be given to the owner or borrower, another would be kept in the massaro’s record book and one receipt would be attached to the item. The monetary funds would then be supplied by the cashier to the borrower. This employee had the duty of keeping their own records of the money collected, loaned and the interest on each loan.During the first year of operations, the Monte di Pietà did not grant loans more than twenty-five lire to people who lived in the city and ten lire to people who lived in the rural area five miles from the city. This restriction was expected to increase as more funds were acquired from voluntary and involuntary donations. If a borrower wanted to regain his pawned item, he would have to return the receipt to the massaro. The cashier would then calculate the interest that was earned on the item and the borrower would have to pay the interest in order to redeem their pawn. This interest collection provided one of the sources of revenue for the daily functions, operations, and salaries of the Monte di Pietà .
The Monte di Pietà‘s employees were responsible for keeping track of the daily operations of the organization. Strict regulation dictated both their work and personal life. For example, fines were imposed for improper or dishonest behaviour. The actual space of the "Monte di Pietà was regarded as a pious and religious house" and therefore stage plays, dances, games and other festivities were forbidden.
The employees’ salaries came from the income generated by the interest payments on loans. The massaro earned 120 florins per year, the cashier was paid 80 florins, the massaro’s two assistants received 30 florins each, the assessors received 40 florins each, and the two servants earned 24 florins each.
Borrowers and Lenders
The Monte di Pietà accumulated capital from members of the patrician class, middle class, corporate groups, guilds, fines resulting from lawsuits and Communed ordered resources. One of the most creative strategies that preachers used in Florentine to acquire more capital for their “monte” was to declare Palm Sunday as a day for donations in the form of alms. The “monte” was supposed to be gathered from "gifts or donations in honour of a person’s love for God". Some scholars hypothesize that members of the artisan class and widows would freely give some money towards the “monte” upon hearing a sermon condemning usury and proclaiming the need to help the poor.While some monetary deposits were voluntary, some people had no choice in funding the capital for the “monte”. For example, Monna Margherita da Poppi of 1497 gave 40 lire to the Monte di Pietà as part of her sentence in a legal matter. The Monte di Pietà was in charge of keeping this money from her until she was married. In this case, the organization of the Monte di Pietà was a dowry fund which became popular during the mid-sixteenth century. More revenues for the “monte” were acquired from the state through ordered fines.
Rules and Regulations
Before the Monte di Pietà actually operated, a group of "eight men assembled to draw up the statues" of the Florentine monte di pietà on April 15, 1496. The eight who gathered were Niccolò de’ Nobili, Piero de’ Lenzi, Bernardo de’ Segni, Niccolò de’ Nero, Piero de’ Guicciardini, Giacopo de’ Salviati, Antonio di Sasso di Sasso and Diacopo Mannucci. It was the members of the patrician class that dominated the prestigious and well paid positions of decision making concerning the Monte di Pietà.Since the purpose of the Monte di Pietà was to combat usury, there were clear guidelines regarding the operations of the organization. For example, the employees had to ensure that all items that were exchanged were free, and therefore the legal property of the person pawning it. Also there were guidelines regarding the kind of items that were permitted, and the amount a person could borrow, both in terms of time and quantity. For example, holy items and unfinished goods such as pieces of cloth were not accepted as pawns for loans.
Impact on Society
The Monte di pietà was developed on the principle of charity. It was designed to aid less fortunate people by providing an alternative to the socially unaccepted Jewish money lending system. However, the reality is that Jewish banks continued to exist with the Monte di Pietà and they each catered to a distinctive clientele.Difference from Montepío
The Mount of Piety is a different organisational form from the so-called Montepío, which appeared during the second half of the 18th century. The Montepío was a mutualMutual organization
A mutual, mutual organization, or mutual society is an organization based on the principle of mutuality. Unlike a true cooperative, members usually do not contribute to the capital of the company by direct investment, but derive their right to profits and votes through their customer relationship...
, agnostic, and government controlled institution established by craftsmen or lesser standing professionals to care for members' needs when disabled or rehabilitating. They operated under a Patron Saint
Patron saint
A patron saint is a saint who is regarded as the intercessor and advocate in heaven of a nation, place, craft, activity, class, clan, family, or person...
and in a church or monastery but without any religious obligation (and many had an ephemeral life).
See also
- History of pawnbroking
- Caritas in VeritateCaritas in VeritateCaritas in Veritate is the third encyclical of Pope Benedict XVI and his first social encyclical. It was signed on June 29, 2009, and was published on July 7, 2009...
for Pope Benedict XVI's reference to this early practice of pawnbroking in paragraph 65.
Further reading
- Benigni, U. 1911. Montes Pietatis. In The Catholic Encyclopedia. New York: Robert Appleton Company. Retrieved July 12, 2008 from New Advent: http://www.newadvent.org/cathen/10534d.htm
- George, L. (Ed.). 1839. The Penny Cyclopaedia of the Society for the Diffusion of Useful Knowledge (15-16). London: C. Knight, 351.http://books.google.com/books?id=FIIMAAAAYAAJ&pg=PA351&dq=monte+di+piete#PPA351,M1
- Livingstone, David. (Ed.) 2008. Monte di pietà. In Oxford English Dictionary. Oxford: University Press. Retrieved July 13, 2008, from http://www. dictionary.oed.com/
- Livingstone, David. (Ed.) 2008. Mount of Piety. In Oxford English Dictionary. Oxford: University Press. Retrieved July 13, 2008, from http://www. dictionary.oed.com/
- Menning, Carol Bresnahan. 1989. “Loans and Favors, Kin and Clients: Cosimo de’ Medici and the Monte di Pieta.” The Journal of Modern History 61 (3): 487-511.
- Menning, Carol Bresnahan. 1992. “The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta.” Sixteenth Century Journal 23 (4): 661-676.http://books.google.ca/books?id=d4fjAAAACAAJ&dq=Charity+and+state+in+late+Renaissance+Italy:+the+monte+di+pieta+of+Florence.
- Menning, Carol Bresnahan. 1993. Charity and state in late Renaissance Italy: the monte di pieta of Florence. New York: Cornell University Press.
- Pullan, Brian S. 2005. “Catholics, Protestants, and the Poor in Early Modern Europe.” Journal of Interdisciplinary History 35 (3): 441-56.
- Toaff, Ariel. 2004. Jews, Franciscans, and the First monti di Pieta in Italy (1462–1500). In S.J. McMichael & S. E. Myers (Eds.). Friars and Jews in the Middle Ages and Renaissance (pp. 239–254). Leiden: Koninklijke Brill.http://books.google.com/books?id=RTUugDNpMzYC&printsec=frontcover&dq=Friars+and+Jews+in+the+Middle+Ages+and+Renaissance&sig=ACfU3U0IuYdaDzzAYfHUo2fzjG65pt4zPQ