hypothecation

American  

[hahy-poth-i-key-shuhn] / haɪˌpɒθ ɪˈkeɪ ʃən /

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?

---

Etymology

Origin of hypothecation

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

Example Sentences

See Examples For:

hypothecation

Even though that’s what would happen under the current system of hypothecation of tax revenues in the US.

From Forbes ● Jun. 10, 2014

Chancellor Gordon Brown was persuaded, against his instincts, to agree to "hypothecation" – earmarking certain taxes specifically for schools and hospitals.

From The Guardian ● Apr. 7, 2011

There are strong democratic, political and economic arguments for the hypothecation of tax to support causes that have both government and public approval.

From The Guardian ● May 18, 2010

The only other resources we have under the circumstances are the banks, and they, as I understand it, are pretty much involved with stock on hypothecation.

From The Titan by Dreiser, Theodore

Only one resource seemed left me—the hypothecation of produce; and a resort to that, at that time, before warehouse receipts became legitimate securities, would be ruinous to our credit.

From Continental Monthly, Vol. III, No IV, April 1863 Devoted to Literature and National Policy by Various