Prize money Totally Explained

Everything about Prize Money totally explained

Generally, prize money or purse is a monetary prize awarded for winning or coming a place in a competition.

Historic use of the term: Royal Navy

In the Royal Navy, prize money was the money paid out to the crew of a ship as a reward for a capture.
   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 a captured ship's value 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 Cruizers and Convoys Act of 1708. An Admiralty Prize Court was established to evaluate claims and condone 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 RAF personnel who had been involved in the capture of enemy ships.

Distribution

The following scheme for distribution of prize money was used for much of the Napoleonic wars, the heyday of prize warfare. Allocation was by eighths. Two eighths of the prize money went to the captain, generally propelling him upwards in political and financial circles. One eighth of the money went to the admiral who signed the ship's written orders (except that if the orders came directly from the Admiralty in London this eighth also went to the captain). One eighth was divided among the wardroom officers (the lieutenants, sailing master, surgeon, and captain of marines if any). One eighth was divided among the principal warrant officers, lieutenant of marines, chaplain and flag secretary if any. One eighth was divided among the junior warrant and petty officers, their mates, sergeants of marines, 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.
As complex as this scheme was, it was replaced by one of even greater complexity in the reforms of 1808. In this process, the admiral (if there was one) received one third of the captain's share, the captain received two eighths, the wardroom officers one eighth, the principal warrant officers etc. received one eighth and the remaining half was distributed among the rest of the crew, based on their ranks, not evenly.

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