hypothecation

[ hahy-poth-i-key-shuhn ]

noun

1. the act of pledging movable property, stocks, income-generating contracts, etc., to a creditor as security without actual transfer of ownership:

   The laws of Solon permitted hypothecation but forbade personal slavery for debt.

2. British Government. the act or practice of designating a specific tax to pay for a specific expenditure:

   Hypothecation is a dangerous route to go down; if property taxes are used to pay for infrastructure, does that mean those who don’t own property can’t walk on the sidewalks?

Word History and Origins

Origin of hypothecation¹

First recorded in 1655–65; hypothec(ate) ¹( def ) + -ation ( def )

Example Sentences

He raised money for immediate needs by hypothecation of the state securities.

From Project Gutenberg

Dettermain and Newson had declined to undertake the hypothecation of his annuity.

From Project Gutenberg

He told briefly the details of the transaction; even the hypothecation of the Parsons bonds.

From Project Gutenberg

His credit was almost unlimited, and he could always raise as much money as he liked on an hypothecation of next year's wool.

From Project Gutenberg