Prize Money

By Garland Davis

The awarding of prize money to the crews of capturing ships equal to the value of the ship and cargo of captured prizes. The last prize money paid to a U.S. Navy ship was paid to the crew of USS Omaha CL-4 in 1947 for capture and salvage of the German Raider Odenwald in 1941 prior to U.S. entrance into WWII.

Prize money has a distinct meaning in warfare, especially naval warfare, where it was a monetary reward paid out under prize law to the crew of a ship for capturing or sinking an enemy vessel. The claims for the bounty are usually heard in a Prize Court.

This article covers the arrangements of the British Royal Navy, but similar arrangements were used in the navies of other nations, and existed in the British Army and other armies, especially when a city had been taken by storm.

In the 16th and 17th centuries, captured ships were legally Crown property. In order to reward and encourage sailors’ zeal at no cost to the Crown, it became customary to pass on all or part of the value of a captured ship and its cargo to the capturing captain for distribution to his crew. (Similarly, all belligerents of the period issued Letters of Marque and Reprisal to civilian privateers, authorizing them to make war on enemy shipping; as payment, the privateer sold off the captured booty.)

This practice was formalized via the Cruisers and Convoys Act of 1708. An Admiralty Prize Court was established to evaluate claims and condemn prizes, and the scheme of division of the money was specified. This system, with minor changes, lasted throughout the colonial, Revolutionary, and Napoleonic Wars.

If the prize were an enemy merchantman, the prize money came from the sale of both ship and cargo. If it were a warship, and repairable, usually the Crown bought it at a fair price; additionally, the Crown added: “head money” of 5 pounds per enemy sailor aboard the captured warship. Prizes were keenly sought, for the value of a captured ship was often such that a crew could make a year’s pay for a few hours’ fighting. Hence boarding and hand-to-hand fighting remained common long after naval cannons developed the ability to sink the enemy from afar.

All ships in sight of a capture shared in the prize money, as their presence was thought to encourage the enemy to surrender without fighting until sunk.

The distribution of prize money to the crews of the ships involved persisted until 1918. Then the Naval Prize Act changed the system to one where the prize money was paid into a common fund from which a payment was made to all naval personnel whether or not they were involved in the action. In 1945 this was further modified to allow for the distribution to be made to Royal Air Force (RAF) personnel who had been involved in the capture of enemy ships; however, prize claims had been awarded to pilots and observers of the Royal Naval Air Service since c. 1917, and later the RAF.

The following scheme for distribution of prize money was used for much of the Napoleonic wars, the heyday of prize warfare. The 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. 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).

Perhaps the greatest amount of prize money awarded was for the capture 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 £482–485.

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.In January 1807, the frigate Caroline took the Spanish ship San Rafael as a prize, netting Captain Peter Rainier £52,000.

The crewmen of USS Omaha hold the distinction of being the last American sailors to receive prize money, for capturing the German freighter Odenwald on 6 November 1941, just before America’s entry into World War II, though the money would not be awarded until 1947.

Even though the hunt for the “raider” had been unsuccessful it ultimately proved to not be entirely fruitless. On 6 November, Omaha and Somers, were en route back to Recife, returning from a patrol in the equatorial waters of the Atlantic, smoke was spotted on the horizon. Captain Theodore E. Chandler, Omaha‘s commander, put her on an intercept course with the sighting. As Omaha approached the ship, which was flying US colors with the name Willmoto, out of Philadelphia, identifying her on her stern, she began taking evasive action. While multiple attempts were made to signal the merchant ship, they either went unanswered or they were given suspicious responses. Omaha‘s lookouts also reported that many of the crew visible on the deck of the ship were un-American in appearance.

The ship, which identified herself as Willmoto, did not satisfactorily identify herself to the American warships. After ordering “Willmoto” to heave to, Omaha‘s captain dispatched an armed boarding party. At 05:37 Lieutenant George K. Carmichael, along with the boarding party, began to make way for the vessel. Around this time, the merchant hoisted the signal flags “Fox Mike”, indicating that the ship was sinking and that they required assistance. Two distinct explosions could be heard within the ship when the boarding party began to climb the ship’s ladder. In an attempt to leave the sinking ship, several of the crew had lowered lifeboats, but Lt. Carmichael ordered them to return to the ship. At 05:58, Carmichael signaled to Omaha that the ship was indeed a German ship and that the crew had attempted to scuttle her. She was identified as Odenwald, a German blockade runner and that her holds were filled with 3,857 tons of rubber, along with 103 B. F. Goodrich truck tires and sundry other cargo that totaled 6,223 tons.

Omaha crew members posing on the deck of Odenwald

A diesel engine specialist was brought over from Somers‘s crew to assist with the repairs and prevent Odenwald‘s sinking. Omaha‘s SOC floatplanes and Somers guarded the area while the boarding party made Odenwald seaworthy. With repairs finished the three ships set course for Port of Spain, Trinidad, to avoid possible difficulties with the government of Brazil.

Omaha arrived at Port of Spain, on 17 November 1941, with Odenwald flying the German flag on the mast with the US flag flying over it. It was not until 30 April 1947, that a case was brought by Odenwald‘s owners in the District Court for Puerto Rico, against the US. Their claim stated that because a state of war between the United States and Germany did not exist at the time of capture the vessel could not be taken as a prize or bounty. The court, however, given the fact that Odenwald was rescued from sinking by the US crew, declared that the seizing of the ship was defined as a legal salvage operation. The US was awarded the profits that were made from Odenwald and her cargo. All the men of the original boarding party received $3,000 each, while the rest of the crewmen in Omaha and Somers, at the time, were entitled to two months’ pay and allowances. The laws have since been revised, making this the last time that US Navy members received such an award.