Madre De Dios

December 2024.

In 1592, Walter Raleigh captured the Portugese ship Madre de Dios during the Battle of Flores. The cargo — jewels, gold, spices, etc. — was worth about £500,000 at a time when the total GDP of England was about £20m; so this single prize was about 2.5% of GDP.

Such comparisons are always inexact, but let’s apply the GDP perentage to the US today: the Madre de Dios capture would be like grabbing something worth $700B. In comparision:

• During the California Gold Rush, about 750,000 pounds of gold were extracted in the first five years. At $2500/ounce, that’s about $30B.
• The value of everything inside the Louvre is about $35B.
• The total value of all land in Rhode Island is about $90B.

So this was a huge prize. After the battle, the English privateers took the Madre de Dios to the Dartmouth Harbour, where it was immediately looted. The £500k cargo was reduced to about £140k by the time that it reached Elizabeth’s treasury. States were weak in the 1590s, and there wasn’t much that the Crown could realistically do to prevent theft.

But the incentives didn’t help. The reward to the common mariners who won the battle of Flores and captured the Madre de Dios was only £1 per man — about two months’s wages. An ounce of easily-concealed gold was worth about £4. The results were predictable. (The crown eventually got less stingy. When the Hermione was captured in 1762, seamen received about £482. Naval wages were around £10 per year at the time, so this was a substantial prize — something akin to $2.4M in the United States today, using modern US Navy wages of ≈$50k per year.)

Elizabeth was similarly sharp elbowed with the privateering leadership. She originally tried to keep the entire £140k, notwithstanding the typical split of spoils. Eventually, someone pointed out that such a seizure would “utterly overthrow all service” as the privateers “would never be induced further to venture”. In the end, Lord Cumberland, the principal financier of the expedition, got £37k; net of expenses, he cleared just £5k on £19k invested, a 26% return. The crown took about £80k, and the remainder was split amongst smaller investors and privateers.

Amusingly, Sir Walter Raleigh — history’s most famous privateer — was imprisioned in the Tower of London at the time, as punishment for an unauthorized marriage. The looting of the Madre de Dios got so out of hand that the queen exasperatedly plucked Raleigh out of prison, and shipped him off to Dartmouth to fix the mess. (He was immediately thrown back in the Tower upon return.)