Windfalls of War

News of Commodore George Dewey’s victory over a Spanish naval force in the Battle of Manila Bay on 1 May 1898—a century ago—set off a wave of celebrations and souvenir sales the likes of which the United States had rarely seen. Celebrations erupted again on 3 July over news of the naval victory at Santiago, Cuba, but a controversy concerning which officer deserved the credit— Rear Admiral William T. Sampson or Commodore Winfield Scott Schley—dampened spirits measurably.

The history of Manila Bay and Santiago is relatively well-known.¹ Forgotten, however, has been the fact that these engagements also had legal ramifications and claims for prize and bounty money, which, in the case of Dewey, went all the way to the U.S. Supreme Court.

The Act for the Government of the Navy, passed on 5 March 1799, stated that “all captured national ships or vessels of war” belonged to the United States and that “all other ships or vessels, being of superior force to the vessels making the capture, in men and guns, shall be the property of the captors.” In cases of ships from an inferior force, the act provided that they “shall be divided equally between the United States and the officers and men of the vessel making capture.”

The law directed that the captain of a victorious ship was to receive 3/20ths of the total amount awarded to the captors, unless he was under a squadron commander, in which case the ranking officer got l/20th and the ship captain received 3/20ths. Lieutenants, sailing masters, Marine officers, surgeons, and chaplains split 2/20ths. Seamen, ordinary seamen, Marines, and boys divided 7/20ths.

The law also outlined the rules for determining the value of an enemy warship, based on armament and complement. For example, every 24-pound cannon was worth $200; an 18-pounder was valued at $150, and so on. In the case of the complement, every enemy officer and man was worth $40 each. In addition, the law stated that any U.S. ship or ships “in sight” at the taking of a prize, or in sight at the time the enemy surrendered after an engagement, were entitled to share in the prize money.²

Congress passed a new law in April 1800, increasing the shares of some junior officers to 3/20ths and one-half. More significant in this iteration was the value of each man in the enemy force—$20 a head.’ During the War of 1812, the value of an enemy prisoner was increased first to $25 and then to $100 a head.⁴

During the Civil War in March 1862, Congress passed a law to facilitate judicial proceedings in regard to captured property. To ensure a better administration of the prize law, a Prize Commission was to take evidence, and the court was to determine what vessels should share in the bounty and whether a prize was of equal, inferior, or superior force to that of the victor. Then in July 1862, Congress passed a revision, which said that if an inferior force of the enemy was destroyed, payment for enemy personnel would be based on $100 a head. If the enemy force was of equal or superior strength, the bounty would be $200 for every member of the vanquished. If a U.S. Navy vessel captured an enemy ship and had to destroy it, the money paid would be based on $50 a head. A section of the older law, which allowed a ship within sight to share in the prize money, was changed to a vessel within signal distance.⁴

Additional legislation passed in June 1864, giving shares of the prize money to the commanding officer of a fleet, to a fleet captain, to the commanding officer of a division of the fleet, and to the commanding officer of a single ship. Thus, the latter would get l/10th of the total sum. This law also stated that a court was to determine which vessels should share in the prize money and whether or not a vessel was within signal distance and in a position to render effective aid.⁶ By this time, there were recognized legal differences between the application of the prize law—which meant bringing an enemy ship into port for condemnation—and bounty law—which applied to enemy warships destroyed or rendered ineffective at sea.

By the 1870s, the number of laws and court decisions relating to them led Congress to consolidate what was still pertinent. In 1878, a volume of revised statutes reorganized the legislation according to executive departments. Pertinent here is that all information pertaining to prizes was in one place, under Title XV, which concerned the Navy.

The Revised Statutes said that if a prize was of equal or superior force to the vessel or vessels making the capture, the net proceeds from the condemnation proceedings would be distributed to the captors. If the prize was of an inferior force, then the money was to be divided 50-50 between the captors and the United States, and the formula for distributing the money was by rate of regular pay. Thus, the commander of a fleet or squadron got l/20th of all prize money awarded. The commander of a single vessel received l/10th of the total, or 3/20ths if his ship was acting independently of a superior officer. Any Navy vessel within signal distance was entitled to share in the proceeds. Before it issued a decree of condemnation, the court had to take testimony and consider the claims of various ships in order to determine the force strength of the prize.

In addition, the United States was to pay a bounty for each person on board an enemy ship at the commencement of a battle. If the enemy ship was sunk or destroyed, and its strength in officers and men could not be ascertained, then an estimate was to be prepared based on the U.S. practice for similar ships. If the opposing force was inferior to the U.S. force, the bounty was calculated at $100 for every enemy officer and man. If the defeated force was deemed superior, then the bounty would be on the basis of $200 a head.⁷ In 1887 Congress gave the Court of Claims jurisdiction over all claims founded on the laws of Congress.⁸ Such was the legislative background at the time of the Spanish-American War.

Spain asked for peace 23 days after the Battle of Santiago, and on 10 December, the Treaty of Paris brought the war to a close. Then came the time to determine the amount of money due to the naval victors of Manila and Santiago. On 20 January 1899, Secretary of the Navy John D. Long wrote to the Court of Claims that the Navy Department had claims for prize and bounty money before it that involved “controverted questions of fact and law,” requiring decisions on various points.

The first question concerned the Battle of Manila Bay, and the strength of the U.S. force in relation to that of Spain. If shore and underwater defenses were counted, the Spanish force was superior. If not, the U.S. force was superior.

A second question involved the names of all the Spanish ships sunk or destroyed, which fell under the prize law. But three other Spanish ships were disabled, captured, and taken into the U.S. service. Another Spanish ship was not disabled but was captured. How should such ships be counted?

Question three concerned the names of the U.S. ships entitled to share in the money. It would be difficult to determine which were within signal distance and thus entitled to shares, as well as the status of various vessels, such as colliers, which were acquired and converted for use during the war.

Secretary Long said that the attitude of the Navy Department toward the claims of Dewey and Sampson and their men was not one of hostility. The purpose was to determine “the rights of all parties concerned in order that the nation’s bounty may be promptly and equitably dispensed.”⁹ Court of Claims justices thus had time to consider the various questions before the Navy Department forwarded the claim from Admiral Dewey on 13 July 1899, and four days later, one from Admiral Sampson.

Representing Dewey was the law firm of Herbert, King and Nicou, the senior partner of which, Hilary A. Herbert, was a former Secretary of the Navy. This team argued that Dewey had defeated a superior force. He had had to contend with shore batteries around Manila harbor, mines in the bay, as well as the guns of the Spanish squadron anchored before the city, they claimed.

When the prize laws were first enacted, strength of opposing forces usually could be determined by estimating the weight of the projectiles discharged. But 100 years later, many other factors, such as armor, explosive shells, rapid fire guns, revolving turrets, spar torpedoes and submarine mines had to be considered. Furthermore, when Congress raised the payment in 1864 for enemy personnel from $20 to $100 and doubled the amount paid for a successful engagement with a superior force, it recognized that naval personnel faced increased hazards. Since Dewey had to overcome such obstacles to win his victory, all of these weapons should have been counted as a part of the force defending Manila. The law was “intended to reward the personal valor, enterprise, and perseverance of our sailors,” so no part of it could be eliminated without damaging the life and spirit of the law.¹⁰

Assistant Attorney General Louis A. Pradt challenged this interpretation, arguing that a literal reading of the law seemed to confirm that only naval forces were to be considered when comparing the strength of the combatants. While the law was intended to reward based on the strength of an opponent, it said nothing about shore batteries. No provision in the law rewarded the heroism of the ground forces. Dewey therefore was entitled to recover only an amount fixed by the court for overcoming an inferior force.¹¹

The justices of the Court of Claims looked at past prize cases and determined that batteries and mines must be excluded. Therefore, they determined that Dewey was entitled to compensation on the basis of having defeated an inferior force. His award, based on his position as the commander of the squadron, was set at $9,5 70.¹²

Dewey’s lawyers appealed, and the case went to the Supreme Court, apparently the first time it had been asked to rule on such a question. On 14 May 1900, Justice John Marshall Harlan delivered a majority opinion that upheld the Court of Claims ruling. Chief Justice Melville Fuller filed a dissenting opinion, with concurring opinions by Justices Edward D. White and Joseph McKenna, contending that the entire force of the enemy should be the basis for determining the bounty to be paid, and that the law should be interpreted liberally in favor of the claimants. Nevertheless, the majority prevailed, and Dewey was paid on the basis of having defeated an inferior force.¹³ Following this major decision, the Court of Claims found itself applying the law to a number of individual claims or circumstances that required case-by-case rulings.¹⁴

With Dewey’s case out of the way, the Court of Claims considered the petition of Admiral Sampson, who argued that his ships had not defeated a superior force at Santiago, but he called attention to the threat from Spanish land batteries and torpedoes. After the Court had ruled against that argument in the Dewey case, Sampson had no hope of getting very far with it. On 11 June 1900 the Court ruled that Sampson had defeated an inferior force, and that he was entitled to a l/20th share of the bounty money or $8,335.¹⁵

What was interesting about the Santiago cases was the dispute among members of Sampson’s fleet. The officers and men of the New York, Harvard, Resolute, and Fern did not participate in the battle, but they were within signal distance, and they were thus able to render effective aid, if needed. After the decision on Sampson, a total of $158,365 was to be divided among the officers and men of 13 ships, including the Harvard, Resolute, and Fern. Thus, the share would be smaller for those who had actually fought the battle.

The officers of the other ships especially opposed the claims of the Harvard, which was unloading cargo in Altares, Cuba, when the Spanish ships sortied from Santiago. Sampson’s flagship, the New York, signaled this news to the Harvard and ordered her to close in for an attack. But the signal was in a provisional code unfamiliar to the men in the Harvard, and no record indicates that it was ever received.

An hour and ten minutes later, the Resolute steamed past Altares, signaling the Harvard that the Spaniards had fled. The Harvard then recalled her boats immediately and prepared for action. As she sailed down the Cuba coast, she passed burning Spanish warships and overtook the USS Indiana and a torpedo boat, both of which were searching for a missing Spanish cruiser that the Harvard reported sighting east of Daiquiri. Both the Indiana and the torpedo boat went off in pursuit of the ship, which turned out to be an Austrian cruiser. Meanwhile, the men of the Harvard were engaged in rescuing Spanish survivors. On 25 March 1901, the Court of Claims rejected the arguments of those who sought to deny money to the men of the Harvard, citing that they were not responsible for missing the New York's signal. When they did receive the signal from the Resolute, they were under way promptly and were within signal distance and capable of giving support during the rest of the day.¹⁶

While the main issues regarding the Battle of Santiago had thus been resolved, entitlement still had to be determined on individual petitions. Not until early 1903 was the last Santiago claim decided; Manila Bay claimants did not receive their checks until 1904.¹⁷

What caused the delay? At the same time Dewey’s case went before the Court of Claims, his lawyers filed another claim in the Supreme Court of the District of Columbia involving three named Spanish protected cruisers sunk during the battle and later raised, repaired, and put to use. According to Dewey, their value totaled $425,000. In addition, Dewey sought prize money for the contents of the Cavite Arsenal and related vessels that had been captured by his naval force on 3 May 1898. Dewey had appointed a board of four officers to survey, inventory, and appraise the captured property, and a report on this survey had been sent to the Secretary of the Navy. A copy of the completed report was included in the material sent to the court.

Dewey estimated the value of the captured property to be $326,141.89. Not included were the guns, armament, and supplies captured at Cavite and from the shore batteries defending Manila. Among other things, they included 61 rifled guns, the average caliber of which exceeded seven inches. Four others were of 9.5 caliber and fired a heavier shell than any gun in Dewey’s force. The value of this material had to be determined and applied to the total compensation sought.

Lawyers for the United States argued that these items were not subject to condemnation under the prize law. The D.C. Supreme Court ruled that the Spanish warships and all captured vessels, except those that had been returned to private owners, and all property belonging to captured ships, as well as that belonging to the ships sunk or destroyed in the Battle of Manila Bay, were lawful prizes. But all property captured ashore and all non-seagoing craft and floating derricks were not.

While Dewey’s case was pending, the captain of the English collier blanshan, which Dewey had purchased and taken with his squadron to Manila, submitted a claim on 26 March 1901 for a share of any prize money awarded to Dewey. The D.C. court ruled against him. Both the captain and Dewey appealed these decisions in the U.S. Supreme Court, which heard arguments on 28 and 29 October 1902. The Supreme Court announced its decision on 23 January 1903.

Chief Justice Fuller said that the District court had acted correctly in dismissing the two cases. In the case of the Nanshan, she was not a Navy ship; her crew was not enlisted in the U.S. Navy; her five-man naval gun crew was to protect the collier from attacks by small boats; and while she was within signal distance of the U.S. warships during the battle, she was not in a condition to render effective aid.

Regarding Dewey’s claim, the court ruled that the named Spanish warships were lawful prizes. Items taken from enemy ships sunk or destroyed in the battle were not subject to the prize law but were included in the award of naval bounty. Naval stores captured at the Cavite Arsenal were adjudged to fall within the rules of the prize law. Barges propelled by sweeps or poles and non-seagoing craft, such as floating derricks, were the property of private citizens and not subject to the prize law.

When the prize money for Manila Bay was finally distributed, half went to the naval pension fund and half to the claimants. Of the $370,335 distributed, Dewey received $18,566. Fleet captains received between $3,000 and $7,000. And each enlisted man got about three months’ pay, depending on his grade. The lowest amount distributed was $69.¹⁸

What did the public think about these cases? For the most part, only large Eastern newspapers paid any attention. When news items were published, they were generally brief and factual and evoked no comment.¹⁹ Dewey’s reputation had suffered a dramatic decline as a result of his short-lived presidential candidacy in 1900 and other evidence of his naivete.

This lack of response in contemporary newspapers and the fact that source materials are mainly of a legal nature is the probable reason that the prize and naval bounty aspects of the Spanish-American War have not been noted in most historical accounts. With regard to the naval leaders, authors Laurin Healey and Luis Kutner mention Dewey’s claim in their biography, The Admiral, but they tie it to the election of 1900 and show little understanding of the facts regarding the case.²⁰ How and why did prize and bounty money come to an end? The beginning of an answer can be traced to 10 December 1898, when the Treaty of Paris ended the war. Under its terms, the United States acquired Guam, Puerto Rico, and the Philippine Islands. Congress and the public were aware of these terms when Congress met in January 1899. Early that month, legislation was introduced to appropriate $2 million to pay bounty money for the destruction of Spanish warships at Manila and Santiago.

On the 12th, Congressman Thomas Spight of Mississippi introduced a bill to abolish such payments.²¹ What inspired this action cannot be fully ascertained. What is known is that Spight was opposed to the acquisition of the Philippines and fearful of the effect this involvement might have on U.S. institutions. And he probably was aware of the pending prize and bounty appropriation. The bill may have been his effort to save money and to prevent naval officers from profiting from future battles.

It was later incorporated as a section in another bill, entitled “A bill to reorganize and increase the efficiency of the personnel of the Navy and Marine Corps,” which became law on 3 March 1899. While prize and bounty provisions were repealed, this did not affect pending cases. The end of the prize and bounty provisions escaped the notice of the press and Navy publications. Instead, attention focused on a bill passed on the same day, providing funds for building three battleships, three armed cruisers, and six protective cruisers.²²

Neither have naval historians noted the end of the prize law. With his signature, President William McKinley ended a process associated with the early history of the republic and one of the inducements for men to enlist for war service. Henceforth, Navy men would he expected to fight only out of a sense of duty and patriotism. As for the Dewey and Sampson cases, they illustrate the growing complexity of war and the potential destructive power of weaponry. But perhaps the most surprising aspect of the controversy was the role of the Supreme Court in judging the amount of money to be paid. All in all, the cases are intriguing footnotes in the biographies of Dewey and Sampson and a forgotten result of the Spanish-American War.