Monte di Pietà

The Monte di Pietà were the first pawnbrokers in Europe.

Definition

Both the Italian term monte di pietà and the French term mont de piété translate into English as mount of piety.

The first institution was started in 1361 by the Bishop of London, 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. The capital was eventually consumed, and the bank closed. [CathEncy|wstitle=Montes Pietatis]

More permanent institutions developed in fifteenth century Italy and was developed in cities as a reform against money lending. [George 351.] It is an example of one of the earliest forms of organized charity. More specifically, a public office which was organized and operated by Christians would offer financial loans at a moderate interest to those in need. [Pullan 446.] This was viewed as a lesser evil than money lending because the principle of the organization was based on the benefit of the borrower and not the profit of the lender. [George 351.] The spreading of this organization throughout the continent of Western Europe during the Middle Ages [George 351] can be credited to the preaching of Franciscans and their condemnation of usury. [Toaff xii.] However, the Monte di Pietà was supported by both Franciscan and Dominican preachers, and also humanist intellectuals of the fifteenth century. [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 662.] In 1462, the first recorded Monte di Pietà was founded in Perugia. Between the years 1462 and 1470, an estimated forty more of the same organization were developed. [ Toaff 12.] 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. [Menning, "Loans and Favors, Kin and Clients: Cosimo de’ Medici and the Monte di Pieta" 487.] The organization of the Monte di Pietà depended on acquiring a monte or 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. [Menning, "Loans and Favors, Kin and Clients: Cosimo de’ Medici and the Monte di Pieta" 491.]

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 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. [Menning, "Charity and state in late Renaissance Italy: the monte di pieta of Florence" 58.] Generally, the loan would not exceed two thirds of the object’s value. [Menning, "Loans and Favors, Kin and Clients: Cosimo de’ Medici and the Monte di Pieta" 491.] 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. [Menning, "Charity and state in late Renaissance Italy: the monte di pieta of Florence" 58.] 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 . [Menning, "Charity and state in late Renaissance Italy: the monte di pieta of Florence" 60.] The Monte di Pietà‘s employee’s 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. [Menning, "Charity and state in late Renaissance Italy: the monte di pieta of Florence" 61.] The employees’ rather liberal 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. [Menning, "Charity and state in late Renaissance Italy: the monte di pieta of Florence" 62.]

Borrowers and Lenders

The Monte di Pietà accumulated capital from members of the patrician class [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 675-6.] , middle class, [Menning, "Loans and Favors, Kin and Clients: Cosimo de’ Medici and the Monte di Pieta" 510.] corporate groups, guilds [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 674.] , fines resulting from lawsuits and Communed ordered resources. [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 661] 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. [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 669.] The “monte” was supposed to be gathered from gifts or donations in honour of a person’s love for God. [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 667.] 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. [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 699.] 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. [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 671.] More revenues for the “monte” were acquired from the state through ordered fines. [Menning, "The Monte’s ‘Monte’: The Early Supporters of Florence’s Monte di Pieta" 673.]

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 15th 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. [Menning, "Charity and state in late Renaissance Italy: the monte di pieta of Florence" 46] It was the members of the patrician class that dominated the prestigious and well pied positions of decision making concerning the Monte di Pietà. [Menning, "Loans and Favors, Kin and Clients: Cosimo de’ Medici and the Monte di Pieta" 510.] 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. [Menning, "Charity and state in late Renaissance Italy: the monte di pieta of Florence" 48-9.]

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. [Menning, "Charity and state in late Renaissance Italy: the monte di pieta of Florence" 87.] However, the reality is that Jewish banks continued to exist with the Monte di Pietà and they each catered to a distinctive clientele. [Toaff vii.]

ee also

* History of pawnbroking
* Mount of Piety

External links

*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]
*Menning, Carol Bresnahan. 1993. "Charity and state in late Renaissance Italy: the monte di pieta of Florence". New York: Cornell University Press. [http://books.google.ca/books?id=d4fjAAAACAAJ&dq=Charity+and+state+in+late+Renaissance+Italy:+the+monte+di+pieta+of+Florence.]
*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]

Notes

Further reading

*George, L. (Ed.). 1839. "The Penny Cyclopaedia of the Society for the Diffusion of Useful Knowledge (15-16)". London: C. Knight, 351.
*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.
*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.