Prize Money

by Quincy Wright

After the revolution of 1688 English methods of legislation became in many cases crystallized into their present form. This was true of prize money law. In 1692[1] the first statute granting prize money to the captors was passed, for the purpose as the bill stated of encouraging privateers in the pending war with France.

In connection with instructions for privateers issued in 1693[2] provision was made that prize ships taken by privateers should go to the captors but the king was entitled to one-fifth of the goods on board, the other four-fifths going to the captors. Prizes taken by king's or hired ships went, one-third to the widows and children of the slain, the sick and the wounded; one-third to the officers and crew; and one-third to the king. Gun money of five pounds a gun was granted for capturing or destroying a man of war in addition to the prize money. Recaptured ships were to be returned after payment of salvage of one-third to one-eighth according to the time the vessel had been in the enemy's possession.

With the outbreak of the war of the Spanish succession the statutory method of providing for prize distribution was established. By a statute of 1707[3] the sole property in all prizes was granted to the officers and seamen of queen's ships and the officers, seamen and owners of privateers, the capture being first adjudged good prize in a court of admiralty. The act also provided for the payment of head money or bounty to the amount of five pounds per man on board every war ship or privateer of the enemy, sunk or destroyed. The act was to continue only for that war. Orders in council issued on authority of the act provided details for the conduct of prize courts and the division of prize money and bounty among the captors. In reference to this act and the previous history of prize money in England, Lord Loughborough said in 1789,[4] "Before the sixth year of the reign of Queen Anne there were no laws made on the subject. Previous to that time all prizes taken in war were of right vested in the crown and questions concerning the property of such prizes were not the subject of discussion in courts of law. But in order to do justice to claimants from the first year after the restoration of Charles II, special commissions were issued to enable courts of Admiralty to condemn such captures as appeared to be lawful prizes,[5] to give relief where there was no color for the taking and generally to make satisfaction to parties injured. But in the sixth year of Queen Anne it was thought proper for the encouragement of seamen to vest in them the prizes they should take and for that purpose the statutes of 6 Anne c 13 and c 37 were passed." From the foregoing discussion it appears that the learned judge failed to note the statute 4-5 Wm. and Mary c 25 passed in 1692 not to mention the commonwealth statutes of 1648 and 1649. It also seems clear that admiralty courts exercised jurisdiction over prize matters long before the restoration of Charles II.

Queen Anne's act of 1707 is typical of those which have been passed at the beginning of every subsequent war in English history until the passage of the permanent prize act of 1864.[6] Since that time the principle of giving the total proceeds of prize to the captors has been adhered to although the principle that the initial title to all captures vests in the crown has been maintained with equal consistency.

Another act of 1707[7] extended the act previously mentioned to captures made in America and provided for prize jurisdiction in colonial courts of vice admiralty. The outbreak of the war of the Austrian succession brought forth the prize act of 1740.[8] This added to Queen Anne's act the provision that vessels recaptured should be restored to the original owners on the payment of one eighth salvage. A new act was passed in 1744[9] which repeated the former acts adding provisions in regard to privateers. It was provided that captures by privateers should belong to the ship exclusively and division between the owners and crew should be regulated by special contract between them. The admiralty was authorized to issue letters of Marque on receiving of satisfactory bond of good behaviour from the owners.

The act of 1756[10] repeated the provisions of the preceding act with reference to the Seven Years war, as did the act of 1776[11] with reference to the American Revolution and the acts of 1779,[12] 1780,[13] and 1781[14] passed on the outbreak of hostilities with France, Spain and Holland, respectively. In the act passed in 1793[15] to regulate prize matters in the French war a few new provisions were added. Captures on land were put under the jurisdiction of the admiralty and similar principles of division authorized. Joint captures by land and naval forces were to be divided by special orders in council. Recaptures were to be returned on paying a salvage of one-eighth in case the capture was made by a public vessel, and one-sixth if made by a privateer. The duration of this act was extended by an act of 1797.[16] At the outbreak of war with America a prize proclamation was issued, Oct. 26, 1812.[17] It provided "That the net produce of all prizes taken, the right whereof is inherent in His Majesty and his crown be given to the takers". Rules were then given for the division among the officers and crew. An act of 1813[18] authorized this proclamation and an act of the following year[19] gave complete rules for prize distribution. Aside from the matters covered in previous acts it provided that all prize money shares not claimed or forfeited should go to the support of the Greenwich naval hospital. An elaborate scheme for the division of shares was included. By this scheme the proceeds of prizes taken before 1808 were to be divided into five shares, besides the flag shares, which were to be divided among five grades of seamen. Those taken after 1808 were to be divided into eight shares and in the same manner distributed among eight grades of seamen. The sizes of vessels were evidently increasing rapidly, to necessitate this change in the number of grades of mariners.

In 1815 a very elaborate act[20] was called forth by the return of Napoleon from Elba, entitled "an act for the encouragement of seamen and the more effectual manning of his majesty's navy during the present war." It provided that the flag officers, commanders and crew should have sole right in all prizes taken by public armed vessels declared lawful prize before courts of admiralty or vice admiralty to be divided in proportions from time to time decreed by orders in council. Hired armed vessels were subject to the same rules. Captures made with aid of allies were to be divided equally with the ally. Land captures made by the navy were also the sole property of the captors after proper adjudication, but joint captures by land and naval forces were to be subject to special order in council. Desertion, forfeited shared of prize money. Recaptures were to be returned to the original owner on the payment of one-eighth salvage if the captor was a public vessel and one-sixth if a private vessel, except that if the recaptured vessel had been fitted out by the enemy as a war ship it should not be returned to the original owner but should be declared good prize for the benefit of the captors. Head money or bounty of five pounds per man on board every enemy ship at the beginning of an engagement was to be paid all vessels capturing, sinking or destroying a war ship or privateer of the enemy. Ransom of captured vessels was forbidden except in case of necessity. All money given as bounty or salvage was to be subject to the same rules of division as prize money. Letters of Marque were to be granted on proper security for good behavior and the privateers were to be sole proprietors of all captures after proper adjudication. The force of this act only extended to the pending war.

During the middle of the nineteenth century England was engaged in an active campaign to suppress the slave trade. As a result proclamations were constantly issued decreeing the division of the proceeds of vessels captured in this trade. The same rules were followed as in the case of prizes of war, the whole of the captures being given to the captor after adjudication. Such proclamations were issued in 1834,[21] 1846,[22] 1849[23] and were authorized by a statute passed in 1839[24] and amended in 1842.[25]

In the Crimean war of 1854 England followed her old policy in prize distribution.[26] The act of 1815 was practically reenacted. In addition it was provided that for any breach of her majesty's instructions or the law of nations the shares of prize money would be forfeited to the crown. In this war Great Britain was in alliance with France and an interesting treaty was entered into by the two countries providing for the division of prizes between them.[27] Prizes were to be adjudicated by the courts of the country of the officer in superior command in the engagement. Joint captors in sight were to share but adjudication was always to be by the country of the ship making the actual capture. If vessels of one of the allies were captured for illicit trade it was to be tried by the country of the captured vessel. In case of vessels of the two countries acting in conjunction or of vessels of the two countries giving constructive assistance the net proceeds were to be divided to the several vessels according to the number of men on board irrespective of rank. Distribution was to be regulated by the municipal laws of each country. The treaty also contained instruction for bringing in prizes. A similar treaty was entered into by France and Great Britain in their joint expedition against China in 1860.[28]