Tim Worstall used hypothecation in a post, and I went and looked it up at Wordnik. What I found is pasted below.
Tim’s usage of the word related to discussions of policies in the UK to levy a tax specifically (and only) to support the National Health System.
There then may be a good reason why an American like me doesn’t know the word: hypothecation was a big part of the New Deal, and was struck down by the Supreme Court as unconstitutional. Specifically, the Agricultural Adjustment Act of 1933 taxed agricultural processors to subsidize agricultural producers.
from Wiktionary, Creative Commons Attribution/Share-Alike License
- n. The use of property, or an existing mortgage, as security for a loan, etc.
- n. A tax levied for a specific expenditure
from the GNU version of the Collaborative International Dictionary of English
- n. The act or contract by which property is hypothecated; a right which a creditor has in or to the property of his debtor, in virtue of which he may cause it to be sold and the price appropriated in payment of his debt. This is a right in the thing, or jus in re.
- n. A contract whereby, in consideration of money advanced for the necessities of the ship, the vessel, freight, or cargo is made liable for its repayment, provided the ship arrives in safety. It is usually effected by a bottomry bond. See Bottomry.
from The Century Dictionary and Cyclopedia
- n. In Roman law, mortgage; a contract lien given by a debtor to his creditor as security, without giving him possession of the property. It usually if not always related to real property, while security upon personal property was given by possession, and termed pignus, or pledge.
- n. In French law (hypothèque), a lien on immovable property for security of a debt, without giving the creditor possession.
- n. In American financial usage, a pledge; alien on personal property, particularly on negotiable securities, given by a debtor by transferring possession, with evidences of title, to his creditor.
- n. In modern commercial usage, the mortgage of a vessel or her cargo, as in the phrase hypothecation bond, a bottomry bond or respondentia bond. See bottomry and respondentia.