HISTORY OF SAN MIGUEL DE ALLENDE

The role of pawnshops

If you happen to be walking along Aldama Street (considered one of the prettiest streets in town), take a look at the historical marker on the wall as you approach Cuadrante.

The plaque states: “In this house there used to be the Montepio of San Miguel, in it, a group of Insurgents led by Ignacio Aldama, met to organize the first town hall of Mexico.” That short sentence contains a lot of history! The reference is to what took place the day after September 16, 1810 when the War of Independence broke out, with Ignacio Allende and Miguel Hidalgo as leaders. The next day, the insurgents including Ignacio and Juan Aldama, gathered in this house to elect the first mayor and officials of the nascent nation of Mexico. But there is more to this plaque—the word montepio and its significance.

The term montepio refers to a pawn shop, also known as casa de empeño. So let us delve into the terminology and history and find out about the origins of pawn shops, and specifically the one just mentioned.

Pawn broking is the oldest type of financial institution, providing loans secured by real property. Such loans can be traced back at least 3,000 years to ancient China, Egypt, Greece, and Rome. The word “pawn” comes from the Latin “platinum,” meaning cloth. Clothing was often the most valuable item owned by the working class and could be used to secure a loan. In the 19th century, the poor often pawned clothes on Monday and retrieved them on Friday which was “payday,” a way to make it through the week.

In the Middle Ages, prominent families became moneylenders and pawnbrokers. England’s King Edward III pawned his jewels in 1388 to help finance the war against France, and Queen Isabella of Spain pawned her royal jewels to finance Christopher Columbus’s voyage to the New World.

As one would expect, without regulations, pawnshops could and did charge outrageous fees. In some cases, the interest could be as high as 200 percent per year for the loans. Therefore, in the 15th century in Italy, Franciscan friars began offering pawn loans with low cost or no fees whatsoever, and named these institutions “Montes Pietatis,” meaning mounts of piety. These charitable loan foundations spread throughout Europe, and in Spain, the name became a shortened version: montepio.

Pawnshops in New Spain started in 1775 in Mexico City with the Monte de Piedad de Ánimas, the first of its kind in the Americas. Montepios were particularly helpful during the insurgency period in New Spain providing pensions for widows and orphans.

In San Miguel el Grande, pawnshops appeared following the great famines of 1783 and 1785-86. The first montepio in San Miguel was established during this period by members of some of the wealthiest families in town with the express intention of helping the poor. These early pawnshops lent money and, in some cases returned the items without charging any interest. The Unzaga family, who resided at house number 2 in the Plaza de Nuestra Señora de la Salud (the plaza with the statue of Allende on a horse), owned the first pawnshop or small credit establishment. The second pawnshop belonged to the family of Felipe Dobarganes, and was located on the corner of Correo and Conde—today Diez de Sollano. The house on Aldams Street is the only one with a plaque, and it belonged to a Spaniard, Fermín Victorero and his mother.

A pawnshop would have a counter at which the goods were received. After a quick and highly subjective evaluation of the item’s worth, a password was given to be used when claiming the item back, and the money was handed over to the customer.

These establishments were practically warehouses filled with all sorts of items—part bazaar, part antique shop. Espinosa[i] gives a detailed description of what it was like: The shelves were crammed full, on one side, hangers filled with elegant garments, long silk, velvet or brocade dresses hung in rows. Next to them were coats, some sporting somewhat worn furs. Beyond that, a stole, of some unknown animal, neatly folded, elegant shawls and imported mantillas.

A gentleman had fewer objects to draw upon—perhaps a walking stick with its ivory or gold handle, a bowler hat, an English cashmere suit, or the silver buttons from a charro suit, hat and all. When times were rough, the first thing to be given to a pawnshop was the gold or pocket watch with its precious chain. On the next trip, would go the diamond rings, the lapel pin, the cufflinks, and the tie clip. These, however, were the items brought in by the well to do who had fallen on hard times.

[i] Much of the information in this article comes from the book of Cornelio Lopez Espinosa: La Villa de San Miguel el Grande y la Ciudad de San Miguel de Allende.

In an adjoining room, dozens of humble dresses were crammed together, made of percale, rebozos, and petticoats. A glass-fronted display case contained feathered hats and gloves, and the jewelry pawned by the society ladies in their moments of “distress.” There were silver and gold rings, earrings with precious stones, pearl necklaces, and gold or silver cigarette cases. Sometimes even dishes and cutlery ended up in storage waiting to be reclaimed.

The montepios helped anyone who was undergoing financial stress, but they were essential for the poor, who were the majority of the population. For those with meager means, the loans even in small amounts were often the difference between life and death. Pawning a garment or a valuable object usually happened after an epidemic or plague, crossed the threshold of a humble home bringing illness or death to the main breadwinner. During those times, lines of humble and distressed residents of San Miguel—men, women, and children—gathered in front of the pawnshop and slowly waited their turn to pawn a blanket, a shawl, their grandmother's old rosary, or the crucifix above their bed. That money could then be used to buy medicine for their sick or a few sacks of corn and beans to ease the family's hunger for a few days.

But sickness and death visit the poor and the rich alike. Wealthy farmers and city dwellers, upon dying, left behind numerous bottles beside their beds as a memento of their struggle for life—some empty, others nearly full with pills and potions prepared by the doctor or pharmacist trying to save their lives.

Those who pawned their belongings never lost hope of paying off the debt and interest and recovering their beloved objects. Many did, but many never reclaimed their items, and those became the ownership of the pawnbroker to sell to anyone. And in some cases, as it happened in San Miguel el Grande, everything was lost when the shop and all its contents were burned in a fire, bringing great disaster on all.

Although the montepio on Aldama Street has been closed for a long time, montepios still exist in Mexico and are considered a good option because they offer lower interest rates, higher appraisals for items (up to 89-100% for gold), and greater legal security due to regulation. They are non-profit institutions focused on social assistance and transparency.

Next time you walk past the ancient montepio on Aldama street, take a moment to pause and think of what it must have been like in the 17^th and 18^th century. It is now a repository of memories of the history of San Miguel de Allende.

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[1] Much of the information in this article comes from the book of Cornelio Lopez Espinosa: La Villa de San Miguel el Grande y la Ciudad de San Miguel de Allende.