LOANS UPON PLEDGE

Taranaki Daily News, 18 October 1930, Page 5 (Supplement)

LOANS UPON PLEDGE

I UNPROFITABLE PAWNSHOPS. The abandonment of the once-flourish-ing practice of lending money on pledge is a phenomenon of the present-day pawnshop business that has become more and more noticeable during the past six months. Several city pawnshops which once did a profitable business have been obliged, says the New Zealand Herald, by reason o.f the depressed state of trr uj, to close their doors to what they term “the pledge business” and confine their attention solely to the sale of new and second-hand goods.. “A complete change has come over tie pawnshop business in the last few months,” observed the manager of one o th< _a familiar businesses that abound a few doors from Queen Street. “Whereas we used to find that about 80 per cent, of pledges were redeemed, to-day only 20 per- cent, are got rid of. The remaining 80 per cent, are left on our hands and in these times it is practically impossible to sell them. “No one is doing any good in this business,” he declared. “It has grown worse in the last month. The piling up of debts and the present unemployment situation prevent hundreds of our old euito rs from giving us the patronage they used to. Some of these people got intc such a bad way that they would redeem a pledge on Friday, when they drew their wages, and come to us again on Monday for another loan. It would go on like that from month to month; debts piling up to such an extent and income dwindling that they could not eset. pe. from the vicious circle. “Others kept their loans so long that when they came to redeem their pledges they were unable to pay the accumulated interest, leaving us to get rid of pl ges that were pretty well unsaleable and, if disposable, of such small value that the sale price would not pay for principal, much less interest. It was no use continuing that sort of business so we just cut it out and now do nothing but selling.” Another pawnbroker said he had receded visits from 50 people that day and had refused to accept the pledges they offered owing to their insignificant selling value. “What is the use of offering me gold spectacles made to suit only one man’s eyes?” he asked. “People bring me only rubbish which I cannot get rid of, with the result that my shop is chock full of goods that will never be sold. The trouble is they have visited the pawnbrokers so long that they have left all their good property with them and now have nothing but rags. It is really very tragic, although I suppose few people would imagine us pawnbnkers were at heart a sympathetic lot. But what is the use of ’accepting trash? Many of us are doing a freeze as far as business is concerned and the last of us has not, closed down by any mer ns.” i

The time payment system and the opening of chain stores where articles are obtainable at very low prices is blamed by many pawnbrokers for the disastrous state of their businesses. The manager of one shop described how a man inquired the price of gramophones and was offered a good table model for £lO He declined to take it and next day called on the pawnbroker to tell h : m he had bought one at a shop a few doors away by putting down 2s 6d as deposit and paying 5s a week. When asked the price of the gramophone he said it was £l7. .

“What can you do against that sort oi’ thing?” the manager complained. "J'Jat fellow could not possibly afford £l7 for a gramophone yet because he only had to pay half-a-crown deposit he thought he was getting something cheap. Gramophones used to be our best pledge and best saleable article, now we can do nothing with them. They are sc much junk.” "We have more pledges left on our hands than at any time I can remember and me. j money out than we had last j* ar,” said another pawnbroker. “People S’h ply haven’t got the money with which to redeem them or the interest to pay on their loans.