The Amsterdam Stadsbank van Lening (City Pawn Bank) is a not-for-profit city pawn shop dating from 1614 at Oudezijds Voorburgwal 300, with a back entrance at Nes 57. It is the oldest official credit distributor in Amsterdam. Today it has about 85 employees working here, in the associated auction and in the offices on the Bijlmerplein and Osdorpplein. Once they accepted almost everything you could think of (clothes, textiles, merchandise and household items), since 2016 they accept only jewelry, gold, silver, diamonds and watches.
The text above the doorway, written by Balthazar Huydecoper in 1740, reads (translated):
If you have neither money nor goods, then pass this door by
If you have the latter, but miss the first, then come to me
Give me a pawn and I will give you money. Why should I warrant you?
Is it not enough that you live off what is mine?
But if you demand your pawn back, then you must take care in time
To repay me my main sum, with the added interest
So that I can help both you and me, and show the auditors
Of my secrets, the grave of the honorless loan sharks
To describe a visit to the Pawn Bank, which was not seen as being very honorable, eufemisms were used, like: “visiting Uncle John” or “climbing the doorstep of shame” instead of “going to the Lommerd” (from Lombards, the north-Italian pawn brokers who introduced the pawn loans). The Lommertbrug which led to the pawn bank was jokingly nicknamed the “Bridge of Sighs”, even though it doesn’t in the least resemble the famous bridge in Venice.
The revulsion against the charging of interest existed in many cultures. In the 4th century Christian councils denounced the practice, in 789 Emperor Charlemagne issued a law prohibiting the charging of interest. Italian poet Dante Alighieri put the usurers in the seventh circle of Hell. The philanthropy of Italian Renaissance families was partly inspired by feelings of guilt about their profits from interest. The Church’s position was that extracting even a single cent of interest was evil. This stigma continued well into the 1500s, while the local church or a wealthy family were often the only source of capital. Many peasants bought their land by getting mortgages from a monastery.
During the crusades (1100-1300) trade with the Arab world grew and Italian cities started to provide credit against collateral. Credits were initially provided mostly by Jewish bankers, who were not restricted by the dictates of the church. When the pope condoned the practice in the 11th century, Italians entered this credit business too. In the 13th century, when the church prohibited the charging of interest again, many of these lenders moved north. Because they mostly came from the Lombardy and Piemonte regions, they were called Lombards everywhere. They settled in Amsterdam in 1477.
The Italian money changers set up a banca (bench or counter in old Italian) on the many annual markets, traveling with merchants throughout Western Europe. They introduced the “lettera di pagamento” (letter of payment), which was basically a loan with interest, and gave loans for collateral. They provided credit for pawn, eventually mostly to the poor. Their practice of charging way too much interest (sometimes up to 80% yearly in difficult times) eventually meant their demise, as many cities ordered restrictions and took over the handing out of loans. The origin of the term bankrupt also came from these Lombards: when they could not meet their financial obligations or malfunctioned, they had their table demolished, “banca rotta” in Italian, broken bench.
Amsterdam & Loan Sharks
The city first attempted to expel the loan sharks in 1547, but that did not make a big enough dent in the practices at first. Then, after the 1578 Protestant Alteration, additional measures were taken, because the Reformed Protestants were dead set against usury. Some private pawn shops were given permits, the worst were prohibited from operating. To counteract the private loan sharks, the city established their own pawn bank in 1614. They used interest rates between 8% and 16% and any profits were used to finance poor relief. Other cities followed the Amsterdam example later.
Mountains of Compassion
As early as the 15th century some cities in Italy had started to create so-called Mountains of Compassion (Latin: mons pietatis, City Loan Banks), as a protection for people in financial dire straits. The first opened in Perugia in 1462, started by Franciscan monks. These loan banks did not aim for profit and were mostly operated to counteract the private pawn banks. Eventually the church condoned their charging of interest, to keep them afloat.
In Amsterdam the Bankruptcy Chamber (Desolate Boedelkamer) was established in 1643, which mediated between creditor and debtor, holding both responsible for the overcrediting. When the debtor had sold all his belongings, the debt was officially cancelled and the creditor had to accept the additional loss. In 1893 the Bankruptcy law was adopted in the Netherlands — when someone cannot pay their debt and has at least two creditors, they can be stripped of their belongings and declared bankrupt. Even today loans still operate under these conditions.
Location of the City Pawn Bank
Were the City Pawn bank is now, there was originally a peat pond which drained to Rokin, filled in when the Oudezijds Voorburgwal was created. The convent of Saint Mary Magdalene started there in 1407 — a new convent was built in 1422. The water of the ditch running to Rokin was covered in 1550, Enge Lombardsteeg and Wijde Lombardsteeg created on top, a peat warehouse built next to the alley. After 1579 the convent was used by the Leprozenhuis (Leper House). In 1613 the city took over the north wing and the warehouse to establish the City Pawn Bank there. The house on Nes (from 1890) was added to the complex later. The main building on Oudezijds Voorburgwal was added in 1669 as replacement for the old convent wing, the old entrance gate incorporated in the façade.
Above the side entrance on Enge Lombardsteeg the text reads: “To help the needy a loan bank for small sums was established here”. Except of course the very needy were not helped by that, as this only worked if you had something to pawn in the first place. Most people in those times did not have a steady income, as they had seasonal or temporary jobs. Merchants and craftsmen also suffered large fluctuations in income.
Keeping your family housed, fed and warm was a challenge in those circumstances. Many families coped by regularly pawning small items, winter coats, or even Sunday church clothes during the week — to recollect them after payday on Fridays. Clothes handed out by orphanages, schools and other institutions had marks sown into them to prevent pawning. For those who could not turn to family or neighbors these short term loans were essential for survival.
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