23 Facts About Prize money

Prize money refers in particular to naval prize money, usually arising in naval warfare, but in other circumstances.

Prize money was most frequently awarded for the capture of enemy ships or of cargoes belonging to an enemy in time of war, either arrested in port at the outbreak of war or captured during the war in international waters or other waters not the territorial waters of a neutral state.

Claims for the award of prize money were usually heard in a prize court, which had to adjudicate the claim and condemn the prize before any distribution of cash or goods could be made to the captors.

Two roots of prize law and the consequent distribution of prize money are the mediaeval maritime codes, such as the Consolato Del Mare and Rolls of Oleron, which codified the customary laws that reserved legal rights over certain property found or captured at sea, in harbour or on the shore for the rulers of maritime states, and the 16th and 17th century formulation of international law by jurists such as Hugo Grotius.

The first Admiralty Court in England with responsibility for prize and prize money issues was created in 1483 and subordinate Vice-Admiralty courts were later set up in British colonies.

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Beyond this, it was left to the discretion of the Crown, guided by custom, as to what should be allocated to those taking prizes, and how that prize money should be allocated between the owners, the officers and the crew.

The 1643 ordinance introduced two new measures: that part of the Prize money not allocated to the ship's crew would go to the sick and wounded, and that English ships recaptured from an enemy were to be returned to their owner on payment of one-eighth of their value to the ship recapturing them.

Provisions of 1643,1649 and 1650 on the distribution of prize money were repeated after the Restoration in an act of 1661, which expressly allowed the custom of pillage, and allowed the Lord Admiral discretion over any money or goods not allocated to the crews.

The percentages of prize money granted to senior officers were generally higher in the 18th century than in most of the 19th century.

The Prize money Act of 1815, issued after Napoleon's return from Elba, largely repeated the allocation below the flag officers' share into eight grades and, although it lapsed in the same year, its provisions were re-enacted in 1854 at the start of the Crimean War.

Multiplicity of prize money grades survived until 1918, with some refinements to include new ratings required for steamships.

The Naval Agency and Distribution Act of 1864 was a permanent act, rather than one enacted at the start of a particular conflict, stating that prize money was to be distributed according to a Royal Proclamation or Order in Council issued when appropriate.

The Royal Proclamation on the division of prize money dated 19 May 1866 provided for a single admiral to receive, or several admiral to share, one-thirtieth of the prize money pool; a single captain or commanding officer to receive, or several share, one-tenth of the pool, and the residue to be allocated to officers and ratings in 10 classes in specified shares.

The Naval Prize Act 1918 changed the system to one where the prize money was no longer paid to the crews of individual ships, but into a common fund from which a payment was made to all naval personnel.

The Prize Act, 1948, abolished the Crown prerogative of granting prize money or any money arising from Droits of the Crown in wartime.

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 Prize money went to the admiral or commander-in-chief who signed the ship's written orders.

Prize money was awarded to French naval personnel up to 1916, after which amounts that would have been paid as prize money were allocated to a fund for naval widows and wounded.

For ordinary seamen, prize money was rare, the amounts small and payment was often delayed.

In many cases, prize money was paid in installments over several years and crew members frequently sold advance notes for the later instalments at far below their face value, especially in the 18th century, when several of the Admiralties were in financial difficulties.

Any unclaimed prize money was to be retained jointly by the Navy and Treasury secretaries to fund disability pensions and half-pay.

Over 11 million dollars of prize money was paid to US Navy personnel for captures in the Civil War period.

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.