Study On Pawnbroking In Shandong Province During The Modern Times

Pawnbroking has a long history in China, which has experienced a development of more than 1000 years from the initiation in Northern-Southern Dynasties to the disappearance after the founding of the People’s Republic of China. As one of the most important financial organization in ancient times, pawnbroking accommodating the capital, promoting the economic development and the currency circulation, and providing mortgage channels for the broad masses, also supplying government agencies and wealthy landlord with a way to invest and earn interest. All this functions make pawnbroking important in Chinese economic history.The advanced economic and agricultural and the large population in Shandong provided a good foundation for the development of pawnbroking. Until 1850s, merchants who run business of pawnbroking、salt and banking were the strongest merchant groups in Shandong province which proved the high level of pawnbroking development. With the development of pawnbroking, the pawn shops build up a perfect business pattern, the identification of pledged property, formulation of interest and procedures in every transaction shall be conducted in accordance with the rules strictly. In addition, The operation situation of pawn vary according to the characteristics of regional differentiation appeared.In order to standardize the pawn business further, the pawn shop itself and all previous dynasties government would have to organize and manage the pawn. Internal management including the division and management of staff, collection and preservation of the pledged property, etc. The government’s management to pawn shop including issuing the relevant laws of the articles of association, formulating unified norms and standards for the opening and closing procedures, the floating range of interest, solidly furnished period and the punishment rules. The management of the pawn industry brings out the characteristics of standardization in Shandong region.The development of pawnbroking in shandong province has reached the peak in the 1850 s, but since then, due to the influence of social environment, the operations and development process become very tortuous, and destroyed before Anti-Japanese War for the following reasons: Firstly, the war frequently cause social unrest, pawnshop, as centers of the valuables and money, is very vulnerable to robbery and disturbing. Secondly, in the period of late Qing to the Republic of China, the currency market confusion, monetary depreciation, inflation, and the paper tickets spamming of various warlords, led to a serious loss of pawn industry, accelerating its decline. Thirdly, from the beginning of Qing Dynasty taxing on pawnbroking, the tax rates had continued to increase, various duties exorbitant increased year by year. Plus the official compulsory loan, pawn operators’burden got even heavier. Fourthly, the rise of the bank, till, modern banks and rural credit cooperatives and other financial institutions, which were more modern compared with traditional old-fashioned pawnshop, lead to the loss of the pawn customers. Fifthly, in modern times, the society was in turmoil and frequent natural disasters led to people in extreme poverty. The situation "1" had occured from time to time in the pawnshop, and pawnshops had a huge backlog of pledged property at a low price auction, resulting in it can’t return the funds. Sixthly, the operating characteristics of pawnbroking itself determined that its transaction with a certain time lag, liquidity is slow, and need bank loans to maintain operation. Above all sorts of reasons resulted in pawn industry continued to decline in recent years, and ceased to exist until the founding of new China socialist three renovation.