Prize fund

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, authorising them to make war on enemy shipping; as payment, the privateer sold off the captured booty.)

This practice was formalised 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.

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