The Mount of Piety.
As a precursor to the Monte de Piedad in Álava, we must mention the old Cajas de Misericordia (Loans of Mercy) that existed in some towns in the province. These banks had a similar purpose to that of the Montes de Piedad: to prevent the most needy from falling into the hands of usurers, although their recipients were different. The Cajas de Misericordia (Loans of Mercy) were designed for the rural population, to whom they granted loans in kind. Meanwhile, the Montes were concerned with the urban population, who during the 19th century and much of the 20th century had specific monetary needs that they tried to solve. The peasants of Vitoria also occasionally turned to them, needing loans in cash in times of hardship.
Since the creation of the Caja, the possibility of establishing an attached Monte de Piedad was present, but it was not put into practice until 14 September 1856, when it already had sufficient funds to lend the necessary money to the Monte, and when the difficulties faced by the population of Vitoria required it. In this case, it is important to point out the importance of the will of the then mayor Francisco Juan de Ayala.
These types of institutions, born in the mid-15th century and promoted by the Church to combat usury, had to opt for introducing pawn loans and charging interest, even if it was minimal, to guarantee their future. That is, they had to use the same approaches as professional lenders but without fleecing and completely ruining their potential clients. The proper functioning of a Monte de Piedad required harmoniously combining piety with profitability, or at least with the least possible loss, because they never represented a business for the Savings Banks that had them associated, but in their early days they were their main social work.
The Monte de Piedad in Vitoria was not as successful as the authorities had hoped at the beginning, partly due to the lack of adequate facilities for its own purpose. In 1867 its regulations were amended, a separate branch of the Caja was opened, a new schedule was established and it was provided with an appraiser. Since then, operations increased, establishing itself as a necessary institution, and even indispensable in times of economic and social crisis. However, it went through some difficulties due to a shortage of operations, but that was not bad at all, because one must think that if the Monte did not do business it was because people did not need to go to it. Throughout its history, the number of branches increased. In 1925, when the Caja celebrated its seventy-fifth anniversary, the total figure for performance and sales was 8,096, for an amount of 140,133 pesetas, which represented an average of 17.30 pesetas per transaction.
The way things worked was the usual way for this type of entity. When the item to be pawned was presented, it was valued and that amount was granted as credit, payable at the established time and with the interest stipulated for that purpose. In order to recover it, the amount borrowed and the interest had to be paid. If the agreed time was exceeded without the item being pawned being collected, it was sold at the annual auctions that were held, keeping the money obtained for a period of time and, if it was not collected on the appointed date, it was transferred to the funds of the Monte de Piedad.
The passage of time, the improvement in the standard of living of citizens, the gradual introduction of social security and the so-called Welfare State turned this institution into a testimony of another bygone era and of a more difficult life. Although it continued to be active for years, making loans on jewellery or jewelry of special value.