GOOD—Thousands of lucky French people had their financial obligations forgiven after the country’s oldest bank decided to simply wipe their slate clean.
The 3,500 clients who benefitted from the bank’s largesse had debts of 150 euros or less (about $190) with the Crédit Municipal de Paris, also known as the “Mont-de-piété,” the bank of the poor, which has for centuries allowed the needy to get loans against their valuables—a kind of ethical pawnshop, or the original microlender.
The unexpected gift is a way for the bank to celebrate its 375th anniversary. The Crédit Municipal de Paris was created in 1637 by Théophraste Renaudot, a doctor, journalist and philanthropist who wanted to combat poverty by giving the needy access to fair banking.
“The goal was to combat usury,” explains Thierry Halay, who authored a history of the Mont-de-piété.
The good doctor’s idea was to give the poor people of Paris loans they could reasonably hope to repay, at decent rates for the time (about 10 percent annually) against whatever collateral they could produce: pots and pans, linens, silverware, artisans’ tools. Halay found evidence of a 19th-century woman so destitute her only possession was her mattress. Every morning, she would carry it to the bank and pawn it. With that money, she’d buy potatoes, sell them for a profit during the day and buy back her mattress at night.
Today, the bank stores more than a million objects, from the puny piece of jewelry to the grand masterpiece, in headquarters covering a city block in the historical center of Paris. With a capitalization of 60 million euros, the bank had 93 million euros in pawn-broking loans outstanding in 2010.
If your valuable is sold for more than you owe, the profit is yours.Similar city-owned, not-for-profit banks opened all over the country on the same principle: Pawn an object and you get a yearlong loan. Pay off the interest (4 to 8.9 percent annually) and you can extend the loan; pay off the principal and you get your property back. If your valuable is sold for more than you owe, the profit is yours. These banks were eventually granted a state monopoly on pawn-broking loans, which continues to this day; France is thus a country without pawnshops.
Celebrities of the day secretly used the bank: Victor Hugo, Claude Monet and Napoleon’s first wife, Joséphine de Beauharnais, among others. Prince François d'Orléans, third son of King Louis-Philippe, once pawned his watch to settle a gambling debt.
Nearly 700 people come through here every day, on awkward hallways and too-small waiting rooms. Some are clutching a jewelry pouch, others have a letter, which the bank started sending out last week, notifying them to come claim their valuables for free. The operation will continue in waves through the end of February.
The 3,500 clients who benefitted from the bank’s largesse had debts of 150 euros or less (about $190) with the Crédit Municipal de Paris, also known as the “Mont-de-piété,” the bank of the poor, which has for centuries allowed the needy to get loans against their valuables—a kind of ethical pawnshop, or the original microlender.
The unexpected gift is a way for the bank to celebrate its 375th anniversary. The Crédit Municipal de Paris was created in 1637 by Théophraste Renaudot, a doctor, journalist and philanthropist who wanted to combat poverty by giving the needy access to fair banking.
“The goal was to combat usury,” explains Thierry Halay, who authored a history of the Mont-de-piété.
“Interest rates at the time could go up to 130 percent.”
The good doctor’s idea was to give the poor people of Paris loans they could reasonably hope to repay, at decent rates for the time (about 10 percent annually) against whatever collateral they could produce: pots and pans, linens, silverware, artisans’ tools. Halay found evidence of a 19th-century woman so destitute her only possession was her mattress. Every morning, she would carry it to the bank and pawn it. With that money, she’d buy potatoes, sell them for a profit during the day and buy back her mattress at night.
Today, the bank stores more than a million objects, from the puny piece of jewelry to the grand masterpiece, in headquarters covering a city block in the historical center of Paris. With a capitalization of 60 million euros, the bank had 93 million euros in pawn-broking loans outstanding in 2010.
If your valuable is sold for more than you owe, the profit is yours.Similar city-owned, not-for-profit banks opened all over the country on the same principle: Pawn an object and you get a yearlong loan. Pay off the interest (4 to 8.9 percent annually) and you can extend the loan; pay off the principal and you get your property back. If your valuable is sold for more than you owe, the profit is yours. These banks were eventually granted a state monopoly on pawn-broking loans, which continues to this day; France is thus a country without pawnshops.
Celebrities of the day secretly used the bank: Victor Hugo, Claude Monet and Napoleon’s first wife, Joséphine de Beauharnais, among others. Prince François d'Orléans, third son of King Louis-Philippe, once pawned his watch to settle a gambling debt.
Nearly 700 people come through here every day, on awkward hallways and too-small waiting rooms. Some are clutching a jewelry pouch, others have a letter, which the bank started sending out last week, notifying them to come claim their valuables for free. The operation will continue in waves through the end of February.
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