A mount of piety is an institutional pawnbroker run as a charity in Europe from Renaissance times until today. Similar institutions were established in the colonies of Catholic countries; the Mexican Nacional Monte de Piedad is still in operation.
The institutions called monte di pietà originated in 15th-century Italy, where these institutions gave poor people access to loans with reasonable interest rates. It used funds from charitable donors as capital, and made loans to the poor so they could avoid going to exploitative lenders. Borrowers offered valuables as collateral, making the mount of piety more like a pawn shop than a bank.
History
The concept of Mount of Piety was first developed in 15th-century Italian cities as an early form of organized charity, intended as a reform against money lending and the related sin of usury associated with Cahorsins and Lombards.[1] It was primarily promoted by Franciscans such as Barnabas of Terni, Bernardine of Feltre, and Michele Carcano.[2][3]
The public office was organized and operated by the Catholic Church and offered financial loans 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 benevolent alternative to the loans provided by moneylenders.[1] 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.
Organization
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 then 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. Of the three receipts, one would be given to the owner-borrower, another would be kept in the massaro's record book and one 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.
Rules and regulations
Before the Monte di Pietà actually operated, a group of "eight men assembled to draw up the statutes" 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, 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 mutual, 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).
See also
- Caritas in Veritate for Pope Benedict XVI's reference to this early practice of pawnbroking in paragraph 65.
- Christian finance
- History of pawnbroking
- Monte delle doti