Finance: Only the Rich Go into Hock

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For years the pawnbroker's traditional three gold balls have been the symbol of the down-and-outer. Today the poor can rely on relief or welfare agencies, and who goes to the local hock shop? The high-lifers in the middle and upper classes who are overextended at the bank and need a little ready cash with no questions asked.

Smart pawnbrokers spotted the trend a few years ago and set about changing their image. Manhattan's Kaskel's, which now calls itself a "loan broker," looks more like a high-fashion department store with its mink-draped mannequins and velvet-lined jewelry display cases. "We have customers who earn as much as $250,000 a year, and the majority earn more than $10,000," boasts Owner Richard Kaskel.

Last week one customer came in with a particularly urgent problem: she had run up a $3,000 charge at a department store, and the store was threatening to sue. A $9,000 diamond bracelet got her a loan of $3,100—at 2% monthly interest, which is more than twice what the bank would have charged. Nor is trouble the only reason to visit your friendly pawnbroker. Hollywood's movie colony, which dabbles in real estate, thinks nothing of pawning jewels at the California rate of 2½% monthly interest to sew up a juicy deal. And then, of course, there is the stock market.

Bert Greenfield, a partner in Chicago's Fidelity Loan Bank, recalls a woman who pawned a necklace and ring for $25,000. "She came back recently to redeem her pledge and claimed she had doubled her investment."