Prize money

Booty of war, also termed spoils of war is the movable property of an enemy state or its subjects which can be used for warlike purposes, in particular its soldiers' arms and equipment, captured on land, as opposed to prize which is hostile property captured at sea. It is legally the property of the victorious state, but all or part of it (or its value) may be granted to the troops that capture it.[7] In British practice, although the Crown may grant booty and to specify its distribution, this was done by a special proclamation relating to a specific capture which did not set a precedent, not a general measure dealing with all captures made during a war, as were naval Prize Acts.[8] Instances of it being granted include the Siege of Seringapatam, 1799, the capture of Bordeaux, 1814 and the Siege of Delhi, 1857.[7] Although the United States and France had allowed their soldiers to profit from booty on a basis similar to Britain, they abolished the practice in 1899 and 1901 respectively.[9] The Third Geneva Convention now only allows the arms, military equipment and military documents of prisoners of war to be seized and prohibits the award of booty.

Even before the Second Anglo-Dutch War formally began, two steps were taken by the English government that were liable to promote hostility between England and the Netherlands. Firstly, in 1663, the Navigation Act, which aimed to restrict Dutch maritime trade, authorised the capture of English or foreign vessels trading in breach of that act as prizes, and allowed Vice-Admiralty Courts in the English colonies to adjudicate their value, and to award one-third of this value to the captor, one third to the colonial governor and one third to the Crown. These overseas Vice-Admiralty Courts were, from 1692, also able to deal with wartime prizes.[19] Secondly, an Order in Council of 1644 increased the prize money due to the seamen of English ships that took prizes to 10 shillings for each ton comprised in their tonnage, and gun money of at least 10 pounds a gun for any warship sunk or burned.[20]

Although neither Charles II nor his brother James, Lord High Admiral since 1660, had been ungenerous to those Royal Navy captains and flag officers that captured enemy ships, giving them a fair allocation of the value of their prizes, the failure to set out a fixed scale of prize money for senior officers led to a scandal in 1665.[21] The Earl of Sandwich commanded an English fleet that, between 3 September and 9 September, had captured thirteen Dutch East India Company merchant ships of the East Indies spice fleet, and had also captured or sunk several of their escorts. Concerned that Charles's difficult financial position might make him less generous that before, and considering the great value of the cargoes captured, Sandwich, urged on by one of his flag officers, Sir William Penn, agreed that he and Penn should take goods to the value of 4,000 pounds, and that each other flag officer and the three captains that held knighthoods should take goods worth 2,000 pounds, from the captured cargoes: nothing was provided for the untitled captains.[22]

This seizure of goods was represented by Sandwich and Penn as a payment on account of their expected prize money, although it was in clear breach of the instructions issued in 1665 at the outbreak of the war that required ships and goods to be declared as lawful prizes by an Admiralty court before any goods in its hold could be removed. Marsden, (1911), pp. 44–45. Three of those officers offered 2,000 pounds of goods refused to take them, and the untitled captains complained against the arrangement. In the course of the removal of goods from the Dutch ships’ holds, many English sailors joined in the plundering, and a large quantity of spices and other valuable goods were stolen or spoilt. The Earl of Sandwich lost his command, and the government lost goods and money that could have been used to send the fleet back to sea.[23]

English privateers were very prominent at sea during the Anglo-Dutch Wars, attacking the maritime trade and fisheries on which the United Provinces depended, capturing many Dutch merchant ships.[24]

The situation of ships’ captains was remedied by a Prize Act of 1692. This act distinguished between captures made by privateers and by royal ships. Privateers were entitled to retain any ships captured and four-fifths of the goods, surrendering one-fifth of those to the Crown, and it was left to them how they sold their prizes and distributed the proceeds. However, in the case of captures by royal ships, one-third of their value went to the officers and men of the captor, and one third to the king, from which he could reward flag officers. The final one-third was to benefit those sick and wounded, as before, and for the first time was also used to pay dependents of crew members killed and to fund Greenwich Hospital.[25]

The 1692 act also abolished the ancient right of pillage, standardised gun money at 10 pounds a gun and provided for salvage to be paid by the owners of English ships recaptured from the enemy.[26] Until 1692, the allocation of the one-third of the value of prize money due to the officers and men lad been a matter of custom, but it was then fixed as one-third (or one-ninth of the total prize money) to the captain, one-third to other officers and one-third to the crew.[27]

During this war, in 1701, the Admiralty had established a board of Prize Commissioners, who appointed local prize agents at British and some colonial ports, and were responsible for the custody of ships captured both by privateers and royal ships until these captures were either condemned or released. Although privateers were free to dispose of prize ships and goods after they were condemned and any duties were paid, the Prize Commissioners were responsible for the sale of ships and cargoes captured by royal ships, the valuation of ships or goods acquired for Royal Navy use, and the calculation and payment of prize money. As many naval actions in this war took place in the Mediterranean or Caribbean, some captains disposed of captured ships without bringing them before an Admiralty prize agent, often defrauding their own crews of all or part of their prize money entitlement. A Royal Proclamation of 1702 made captains that failed to act through prize agents liable to court martial and dismissal.[28] If the Admiralty Court found that a seizure was unlawful, the ships and cargo was restored to its owner, and the captor would be responsible for any loss or costs arising.[29]

In the Georgian navy, shares of prize money were based on rank. As there were few senior officers, their individual shares were larger than junior officers and very much larger than those of the seamen. The percentages of prize money granted to senior officers were generally higher in the 18th century than in most of the 19th century. Although shares varied over time, and captains within a fleet or squadron could agree alternative sharing arrangements, in the 18th century, an admiral could generally receive one-eighth of the value of all prizes taken by his fleet or squadron, and if there were more than one admiral, they would share that eighth. A captain usually received one-quarter of the value his prize, or three-eighths if not under the command of an admiral. The distribution for other officers and men was less detailed than it later became: other officers shared another quarter and the crew shared the remainder. Any ships within sight of a battle also participated in the sharing of prize money, and any unclaimed prize money was allocated to Greenwich Hospital.[36]

During the Seven Years' War, the crews of privateers operating from the British colonies in America and the Caribbean were often paid wages as well as a share of prize money, but the crews of those operating from British ports usually received no wages and the cost of the provisions they consumed was deducted from their prize money. The owners of privateers generally took half the value of any prize and also charged a further 10% to cover prize agents' fees and other commissions. The captain received 8% of the value by custom, leaving 32% to be shared by the other officers and crew. It was common practice to divide this into shares, with the officers receiving several times as much as seamen, their relative shares being agreed at the start of the voyage.[37]

Perhaps the greatest amount of prize money awarded for the capture of a single ship was for that of the Spanish frigate Hermione on 31 May 1762 by the British frigate Active and sloop Favourite. The two captains, Herbert Sawyer and Philemon Pownoll, received about £65,000 apiece, while each seaman and Marine got £482 to 485.[38][39][40] The total pool of prize money for this capture was £519,705 after expenses.[41]

However, the capture of the Hermione did not lead to the largest award of prize money to an individual. As a result of the Siege of Havana, which led to the surrender of that city in August 1762, 10 Spanish ships-of-the-line, three frigates and a number of smaller vessels were captured, together with large quantities of military equipment, cash and merchandise. Prize money payments of £122,697 each were made to the naval commander, Vice-Admiral Sir George Pocock, and the military commander, George Keppel, 3rd Earl of Albemarle, with £24,539 paid to Commodore Keppel, the naval second-in-command who was Albemarle's younger brother. Each of the 42 naval captains present received £1,600 as prize money.[42] The military second-in-command, Lieutenant-General Eliott, received the same amount as Commodore Keppel, as the two shared a fifteenth part of the prize pool, as against the third shared by their commanders.[43] Privates in the army received just over £4 and ordinary seamen rather less than £4 each.[44]

The prize money from the capture of the Spanish frigates Thetis and Santa Brigada in October 1799, £652,000, was split up among the crews of four British frigates, with each captain being awarded £40,730 and the Seamen each receiving £182 4s 9¾d or the equivalent of 10 years' pay.[45]

After the British abolition of the slave trade in 1807, an additional source of prize money arose when Royal Navy ships of the West Africa Squadron captured slave ships. Under an Order in Council of 1808, the government paid 60 pounds for each male slave freed, 30 pounds for each woman and 10 pounds for each child aged under 14. This was paid in lieu of any prize money for the captured slave ship, which became the property of the British government, and it was allocated in the same proportions as other prize money. Between 1807 and 1811, 1,991 slaves were freed through the Vice-Admiralty Court of Sierra Leone, and between 1807 and mid-1815, HM Treasury paid Royal Navy personnel 191,100 pounds in prize money for slaves freed in West Africa. Condemned slave ships were usually auctioned at Freetown and re-registered as British ships.[36][53] However, in 1825, the bounty for all slaves was reduced to a flat rate of 10 pounds, and it was further reduced to 5 pounds for each live slave in 1830. The decline in captures prompted an increase in prize money in 1839 to 5 pounds for each slave landed alive, half that sum for slaves that had died and one pound and ten shillings for each ton of the captured vessel's tonnage.[54]

Command structure of a Navy ship c. 1810, showing prize money groupings

The following scheme for distribution of prize money was used for much of the Napoleonic wars until 1812, the heyday of prize warfare. Allocation was by eighths. Two eighths of the prize money went to the captain or commander, generally propelling him upwards in political and financial circles. One eighth of the money went to the admiral or commander-in-chief who signed the ship's written orders (unless the orders came directly from the Admiralty in London, in which case this eighth also went to the captain). One eighth was divided among the lieutenants, sailing master, and captain of marines, if any. One eighth was divided among the wardroom warrant officers (surgeon, purser, and chaplain), standing warrant officers (carpenter, boatswain, and gunner), lieutenant of marines, and the master's mates. One eighth was divided among the junior warrant and petty officers, their mates, sergeants of marines, captain's clerk, surgeon's mates, and midshipmen. The final two eighths were divided among the crew, with able and specialist seamen receiving larger shares than ordinary seamen, landsmen, and boys.[55][56] The pool for the seamen was divided into shares, with each able seaman getting two shares in the pool (referred to as a fifth-class share), an ordinary seaman received a share and a half (referred to as a sixth-class share), landsmen received a share each (a seventh-class share), and boys received a half share each (referred to as an eighth-class share).

A notable prize award related to a capture in January 1807, when the frigate Caroline took the Spanish ship San Rafael as a prize, netting Captain Peter Rainier £52,000.[39]

For much of the 18th century and until 1815, the main complaints about prize money concerned delays in its payment and practices that deprived ordinary seamen of much of what was due to them. Although the incidence of captains selling captured ships abroad and defrauding crews of prize money reduced greatly in the course of the century, payment was often by way of a promissory note, or ticket to be paid when the relevant naval department had funds. Although officers could generally afford to wait for payment, which was often made only in London and sometimes in instalments that might stretch over several years, most seamen sold their promissory notes at a large discount.[57] Other seamen authorised another individual to collect their prize money, who did not always pass it on, or lost out when they transferred to a new ship, if their prize money were not forwarded. A final issue of contention was that the value of prizes assessed in overseas Vice-Admiralty courts could be reassessed in the Admiralty Court in Britain if the Admiralty appealed the initial valuation. Excessive valuations in Vice-Admiralty courts, particularly in the West Indies, arose because the courts charged fees based on the prizes' values.[58] This led to delays and possible reduced payments.[59]

To some extent, delays arose from the time taken by Vice-Admiralty courts adjudicating whether captured ships were legitimate prizes and, if they were, their value. In the War of 1812, the Vice-Admiralty courts at Halifax, Nova Scotia and, to a lesser extent, Bermuda had to deal with many, often small, American ships captured both by privateers and naval vessels, leading to lengthy legal delays in adjudication. Once an adjudication was made, providing there was no appeal, the funds from the sale of a captured ship or its goods should have been available for payment within two years, but the whole process from capture to payment might take three years or more.[60]

Under the so-called joint capture rules, which did not apply to privateers, any Royal Navy ship present when a capture took place was entitled to share in the prize money. However, this rule led to disputes where, for example, three claimant ships had been pursuing the captured ship but were out of sight when another captured it, or where a squadron commander claimed a share in a prize captured by his subordinate in disobedience to that commander's orders. In order to minimise disputes, some captains and crews of ships on the same mission made time-limited agreements to share prize money.[29] In the case of privateers, for one to claim a share of prize money, it had to give actual assistance to the ship making the capture unless there were a prior agreement between privateers to share prizes.[61]

The Kingdom of Scotland had its own Lord High Admiral from mediaeval times until 1707, except for the period 1652 to 1661. His jurisdiction over Scottish ships, waters and coasts, exercised through a High Court of Admiralty, was similar to that of his English equivalent.[62] In 1652, the Scottish fleet that was absorbed into the Commonwealth fleet and, although a separate Scottish Admiralty was re-established in 1661, it had no warships designed as such until three relatively small ones were commissioned in 1696.[63]

However, as Scotland was involved in the Second (1665–67) and Third Anglo-Dutch Wars (1672–74) against the Dutch and their allies, the Scottish Admiralty commissioned a significant number of privateers in both conflicts by issuing Letters of marque.[64] Although Scottish privateers were generally successful in 1666 and later, their activities in 1665 were limited, because of delays in the Scottish Admiral issuing regular Letters of marque at the start of the war.[65] At least 80 privateers operating from Scottish ports in these two wars have been identified, and contemporaries estimated as many as 120 may have operated against Dutch and Danish merchant ships, including some English ships operating under Scottish commissions.[66] Apart from ships of the Dutch East India Company, many Dutch merchant ships and of its Danish ally were poorly armed and undermanned. Most of these engaged in Atlantic trade had to sail around the north of Scotland to avoid the English Channel in wartime, and the Dutch whaling and herring fleets operated in waters north and east of Scotland, so they were vulnerable Scottish privateers, who were particularly successful in the Second Anglo-Dutch War.[67] The owners of privateering vessels, were entitled to the greater part of the value of their prizes, as their ordinary seamen usually served for wages rather than a share of prize money.[68]

Admirals of Ireland were appointed in the late Middle Ages to what was a mainly honorific position involving few official tasks. However, from the late 16th century, these admirals became the Irish representatives of the Lord Admiral of England. They were sometimes referred to as the Vice-Admiral of Ireland, but had no control over the royal fleet in Irish waters. Ireland also had its own Admiralty Court from the late 16th century, mainly staffed by English admiralty officials and with a jurisdiction was broadly similar to that of its English counterpart.[69] Much of its activities concerned the many pirates operating off the coast of Ireland during the late 16th and early 17th centuries. The Irish Admiralty had no ships of its own and no authority to issue Letters marque to privateers, but could seize and condemn pirate and enemy ships in Irish ports.[70]

The Irish Admiralty was granted permission to establish a prize court at the time of the Second Anglo-Dutch War, which was considered to be the equivalent of the Vice-Admiralty courts in British colonies.[71] At the outbreak of the War of the Austrian Succession in 1744, the Irish Admiralty Court managed to extend its powers and jurisdiction by obtaining independent prize jurisdiction and enhancing its status from that of a Vice-Admiralty to that of an independent court.[72]

During the Revolutionary War period, the Continental Congress had no navy and relied heavily on privateers who had been authorised by one of the states to capture British ships. Admiralty Courts for the state that had authorised the privateer adjudicated on the ownership of captured vessels and their value, and were subject to oversight by a committee of Congress.[98] The Continental Navy, formed in 1775 was small and outmatched by the Royal Navy, whereas American privateers captured about 600 British merchant ships in the course of this conflict.[99] In 1787, the US Constitution transferred the right to grant Letters of Marque from the states to Congress.[100]

At the start of the War of 1812, the few larger US Navy ships were laid-up, while the Royal Navy had relatively few resources available in the western Atlantic, leaning the field free for privateers on both sides.[101] However, once the US Navy frigates were brought back into commission, they achieved some spectacular successes against weaker British frigates, with Stephen Decatur and John Rodgers both receiving over 10,000 dollars in prize money.[102] However, later in the war, the Royal Navy succeeded in blockading the US Eastern seaboard and capturing several US Navy vessels and a number of merchant ships, and also stifling American privateer activity, although single US Navy warships managed to avoid the blockade and attack British shipping in the Caribbean and off South America.[103]

From the inception of its navy, the United States government granted naval personnel additional payments of two kinds, prize money, being a share in the proceeds from captured enemy merchant vessels and their cargo, and head money, a cash reward from the US Treasury for sinking enemy warships. From 1791, US Navy personnel received half the proceeds of a prize of equal or inferior force, and all the proceeds of a vessel of superior force. Privateers, in contrast, received all the proceeds of any prize, but had to pay duties that rose to 40% during the War of 1812, although they were lower at other times. Generally, half of the net amount went to the owners of the privateer, half to the crew.[104] From 1800, US Navy ships that sunk an armed enemy ship received a bounty of twenty dollars for each enemy crew member at the start of the action, divided among the crew of that ship in the same proportions as other prize money.[105]

Under United States legislation of 1800, whether the officers and men of the navy ship or ships responsible for the capturing a prize were entitled to half of the assessed value of the prize, or the whole value in the case of a capture of superior force, the prize money fund was to be allocated in specified proportions. The captain or captains of vessels taking prizes were entitled to 10% of the prize money fund, and the commander of the squadron to 5% of the fund. In the event that the captain was operating independently, he received 15% of the prize fund. Naval lieutenants, captains of marines and sailing Masters were to share 10%, increased to approximately 12% if there were no lieutenants of marines. Chaplains, lieutenants of marines, surgeons, pursers, boatswains, gunners, carpenters, and master's mates shared 10% of the prize fund, reduced to approximately 8% if there were no lieutenants of marines. Midshipman, junior warrant offices and the mates of senior warrant officers shared 17.5% and a range of petty officers a further 12.5%. This left 35% for the rest of the crew. Any unclaimed prize money was to be retained jointly by the Navy and Treasury secretaries to fund disability pensions and half-pay.[106]

For most of the period between the end of the War of 1812 and the start of the American Civil War, there was little opportunity to gain prize money. After the outbreak of the Civil War, the Confederate States granted some 30 commissions or Letters of marque to privateers, which captured between 50 and 60 United States merchant ships. However, a declaration by Abraham Lincoln that Confederate privateers would be treated as pirates and the closure of the ports of European colonies in the Caribbean as venues for the disposal of prize vessels and cargoes encouraged their owners to turn to Blockade running.[107]

From 1861, US Navy ships engaged Confederate privateers and Blockade runners: as the 1800 legislation only applied to enemies of the United States, which did not recognise the Confederate States, it was unclear if prize money would apply. However, a revised statute of 1864 stated that "the provisions of this title shall apply to all captures made as prize by authority of the United States", allowing prize money claims to be made.[108] Over 11 million dollars of prize money was paid to US Navy personnel for captures in the Civil War period. It has been calculated that about one-third of prize money due was payable to officers under the prevailing rules, but that approximately half of the money actually paid went to officers, most probably because of the difficulty in tracing enlisted men when payments were delayed.[109]

In 1856, the Declaration of Paris was signed: this outlawed privateering by the ships of the 55 nations that signed it. However, the United States did not sign the declaration, in part because it considered that, if privateering were to be abolished, the capture of merchant ships by naval vessels should also cease. Despite this, the United States agreed to respect the declaration during the American Civil War, although Lincoln's cabinet did discuss the use of privateers against British merchant shipping in the event Britain recognised the Confederacy.[110]

A number of changes were made to the allocation of prize money to US Navy personnel in the 19th century in the last being in 1864. This preserved the awards 5% of the prize fund to commanders of the squadron, which now also applied to fleet commanders of fleet and of 10% to captains under the immediate command of a flag officer or 15% for those operating independently. It added new awards of 2% for a commander of a division of a fleet under the orders of a fleet commander and 1% for a fleet captain stationed on the flagship. The most significant change was that the residue of prize money after making these awards was to be divided amongst the remaining officers and men in proportion to their rates of pay. This law also increased the bounty or head money for destroying an enemy warship in action, or any other enemy ship that it was necessary to destroy was increased to 100 dollars for each enemy crew member at the start of the action on a ship of less or equal force, or 200 dollars for each crew member of an enemy ship of greater force, to be divided among the officers and men of the US ship in the same proportions as other prize money.[111]

The small size of US Navy meant that privateering would be the main way it could attack enemy commerce. Until the early 1880s, American naval opinion considered that privateering remained a viable option, although subsequent increases in the size of the US Navy changed this view.[112]

In the Spanish–American War of 1898, neither the United States nor Spain issued commissions to privateers. However, the US Navy was granted what were to be last payments of prize money made by the US Treasury for that war. These were to sailors that took part in the battles of Manila Bay and Santiago and divided prize funds of 244,400 dollars and 166,700 dollars respectively, based on the estimated numbers of Spanish sailors and the value of ships salvaged at Manilla.[113]

During the Spanish American War in 1898, the US Navy was seen by much of the United States population as seeking to profit from prize money and head money to an unacceptable extent, even though the amounts of granted were relatively modest. All awards of prize money and head money to US Navy personnel were abolished by an overwhelming vote of Congress in March 1899, shortly after the Spanish-American War concluded.[114]

It is sometimes claimed that the US Navy last paid prize money in 1947.[115] USS Omaha and USS Somers (DD-381) intercepted the German cargo ship Odenwald on 6 November 1941 while on Neutrality Patrol in the area of the western Atlantic in which the United States had prohibited warships of belligerent powers from operating. Although the Odenwald was not a warship, it was sailing under the United States flag and claiming to be registered there, and also carrying contraband, either of which rendered the ship liable to arrest although not condemnation as a prize. After the Odenwald was stopped, its crew tried to scuttle it and took to the lifeboats. However, a boarding party from the Omaha managed to prevent the Odenwald from sinking and sailed it first to Trinidad, then to Puerto Rico. The United States was not at war with Germany at the time, and after the war, the Odenwald's owners claimed that its seizure was therefore illegal. The Admiralty Court in Puerto Rico, however, ruled in 1947 that the crew's attempt to scuttle the ship, and then abandon, it meant that the Omaha's boarding party and salvage party that jointly brought the Odenwald to port had salvage rights, worth approximately 3 million dollars. It also ruled explicitly that it was not a case of bounty or prize.[116]

Privateers were most numerous in European waters during the seventeenth and early eighteenth-century wars, in conflicts involving Britain, France and the Dutch Republic, and outside Europe in the percent in the American War of Independence, the War of 1812 and colonial conflicts in the Caribbean, involving Britain, France and the United States. However, between 1775 and 1815, revenues declined sharply, largely because the probability of seizing a prize ship fell dramatically, partly owing to the increasing numbers of naval vessels competing for captures. As outfitting and manning ships for commerce raiding was expensive, privateering became less financially attractive.[117]

The Declaration of Paris 1856, by outlawing privateering by ships of signatory nations, would have made it politically difficult for non-signatories, which included the United States to commission privateers in a future conflict,[110] and the privateering using metal-hulled steamships presented the additional problems of maintaining complex engines, the need for frequent re-coaling and to repair more complex damage than that experienced by wooden-hulled sailing ships. In addition, after 1880, many maritime countries paid subsidies so that liners and other fast merchant vessels were built with a view to conversion into Armed Merchant Cruisers under naval control in wartime, which replaced the need for privateers, and no privateers were commissioned after the American Civil War.[118][119]

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