Pawnbroker, one who lends money, at a certain rate of interest, on the security of goods deposited with him, having power to sell the goods if the principal and interest of the money lent be not repaid within a specified time. Among the first who made a business of lending money on pledges were probably Jews and the Cahorsins or Oaursins. The latter are supposed by most writers to have been natives of Cahors in France, but in an edict of one of the French kings they are called foreigners. In the course of the 13th century Italian merchants from Lombardy established themselves in England and France, and afterward in the other countries of Europe. They were bankers and money lenders as well as merchants, and on account of the precariousness of credit took pledges in security for their loans. They formed powerful companies, and in time became the bankers of the kings and nobles to whom they were indebted for protection. Edward I. farmed out to them the customs of his kingdom in consideration of a loan, and Edward III. and Richard II. pawned to them their crown jewels. Lombard street in London and the rue des Lombards in Paris became financial centres, and the name Lombard the synonyme of money lender and usurer.
In the I5th century efforts were made to deliver the needy from their extortions by the establishment of monts de piete (see Mont de Piete), and in 1530 the Lombards were expelled from England, and in the next century from France. The modern pawnbrokers' sign, the three golden balls, is supposed to be derived from the arms of the corporation of Lombards, or from the armorial bearings of the Medici family, who were among the wealthiest of the Lombard merchants. Pawnbrokers were first recognized in English law by the act of the first year of James I. In 1871 there were 3,540 pawnbrokers in London. By the census of 1870 there were 384 in the United States, but the actual number must have been much greater.