Collectors of Native American crafts and jewelry sometimes come across an item being sold as “dead pawn”. The name indicates the item has been part of a quasi-banking system that has been around for thousands of years. It has existed in a variety of cultures and has been the choice of both kings and peasants when cash was needed. This type of trade has historically offered a way for many Native Americans to use their crafts as collateral for needed cash. Even today, pawn shops offer a type of trade that people in need can take advantage of.
Pawn transactions are fairly straightforward. Someone looking to pawn an item leaves the item as collateral with a pawn broker in exchange for a fixed term loan. If the person pays off the loan by the end date and returns for the item, it is theirs again. Should they not pay and return, the item becomes the property of the pawn broker and the loan is cancelled.
The concept behind pawning shows up in the recorded histories of ancient Greece and Rome. It is said that the Spanish Queen Isabella pawned royal jewels to finance the journeys of Christopher Columbus. In Europe during the fifteenth century, pawn shops were referred to as “monti de pieta”, which translates to “banks that take pity”.
In spite of the fact that historically pawn has been used by both rich and poor, over time the practice has become associated with a venue for those in need. Pawnshop loans were available for a wide variety of items, from the everyday to the special. Some historical pawn records show an apron being taken as collateral. This willingness to loan money on even possessions without a great deal of value made pawnshops a means for low wage workers to provide necessities for their families. As one source puts it, “just after WWII, there were 5000 pawn shops in the British Isles and Ireland, lending against anything from clothing to diamond tiaras”.
The concept of pawn found its way onto the reservations as well, particularly the Navajo reservation. With the interest in their crafts and jewelry, the Navajo had items which would bring them needed cash during slow times of the year. They could pawn items such as their jewelry then pay off the loan with the wool from their sheep. It became a system that offered a low interest loan without the necessity of applying to a bank. As with the trading post system, there were both beneficial and not so beneficial results. Over its long history the practice has evolved and changed, with some pawn shops still existing today on the edges of the reservations.
In the early days of the trading posts, pawning items depended on which post accepted the practice. Some were open to taking pawn and some were not. Loaning money on a item as pawn was more complicated and less profitable than trade. Some objected to the practice due to the belief that it caused arguments. One government Indian agent tried to put a stop to the practice altogether. Agent S.S. Patterson in 1887 brokered an agreement with the traders to not accept pawn at all at their posts, using as his argument that the practice was “frequently the cause of a vast amount of trouble and angry disputes”. In spite of Patterson’s agreement, pawn continued to be a source of income for the Navajo.
As with other types of business transactions, pawn shops had their unscrupulous dealers. In the 1960s, due to complaints by the Navajo about practices they found unethical, the Federal Trade Commission held hearings about the business dealings of pawn shops on the reservation. Their three year investigation resulted in new regulations for the shops, a change that led to some of them abandoning the business.
In spite of the difficulties of new regulations, pawn shops did not disappear. Today the practice still offers a way for many to find money without going to a bank. Pawn shops still exist although on the edges of the reservation rather than inside it. The banks with pity are still there for those who need them.