When private enterprise served the public good on the high seas—and made its promoters a bundle
In the years between 1989 and 1994, the big-three American automobile companies (with combined annual sales of well over two hundred billion dollars) contributed about two million dollars to congressional-election campaigns. The ten largest American gas and oil companies, with an even greater chunk of the nation’s gross domestic product, gave contributions totaling seven million dollars. The nation’s trial lawyers, meanwhile, contributed nearly thirty-one million dollars.
It doesn’t take Sherlock Holmes to figure out that vast economic self-interest must be at stake here. After all, as Charles Keating—formerly head of a major savings and loan bank and now in a federal prison—reportedly said when asked if his contributions to congressional PACs had bought him influence, “I certainly hope so.”
The American legal system is uniquely well designed to benefit lawyers, which is why they want to keep it as it is. We have the “American rule,” where each side pays its own legal costs regardless of outcome. Almost everywhere else the loser pays, so only strong cases are initiated. Punitive damages—in effect a civil fine, but one paid to the plaintiff (and his lawyers) instead of the public treasury—are rare elsewhere. So are contingency fees. All of this, of course, is great for the legal profession and goes a long way toward explaining why this country has more lawyers—and more lawsuits—than any other.
But the lawyers have a problem in promoting the status quo. It is one of the peculiarities of democracy, it seems, that one cannot straightforwardly admit self-interest when seeking to influence legislation. Instead, self-interest, however obvious, must always be cloaked in the mantle of the public good, however specious. My personal favorite example of this took place in 1970, when cable television first was coming to New York City. Owners of the city’s movie theaters, horrified by the threat of having to compete with cable, went on a one-day strike and each theater emblazoned its marquee with the slogan “Save Free TV.”
One of the trial lawyers’ main arguments for the status quo, therefore, is that the vast number of lawsuits from which they profit perform a vital public service, forcing doctors, manufacturers, and others to be more careful than they otherwise might. They argue that many malpractice suits make for less malpractice, that product liability suits produce safer products. Private lawsuits, the lawyers maintain, police the public marketplace by going after bad guys, so the government doesn’t have to.
This is an assertion that would be difficult to demonstrate, to say the least. But it is also a very curious one when you consider that most of that thirty-one million dollars in political contributions went to stalwart advocates of big government. Policing the marketplace, after all, has long been considered a quintessential function of government (not the private sector), in the same category as maintaining national defense and domestic tranquility.
The reason is simple enough. When these matters have been in private hands, self-interest and the public interest inevitably conflicted. The private armies of the Middle Ages all too often turned into bands of brigands or rebels. In this century, during the rise of the labor movement, private police forces were often hard to distinguish from goon squads.
Or consider the naval privateers, who flourished in the seventeenth and eighteenth centuries. They, too, were private citizens pursuing private gain and performing a public service in the process, just as the trial lawyers claim to do. In their case they raided the enemy’s commerce during wartime. It was a very dangerous business, of course, but the rewards, like those from a major lawsuit, could be staggering.
An inferior naval power, unable to match the enemy ship for ship, usually has no option but to employ a strategy of commerce raiding—what the French, who practiced it often, call “ la guerre de course .” The U-boat campaigns of the two world wars show just how devastatingly effective commerce raiding can be as a naval strategy.
Earlier privately owned commerce raiders sometimes were just as effective, and, of course, didn’t cost the government anything. But many of the early privateers—Captain Kidd for instance —allowed their self-interest to lead them over the very fine line between privateering and piracy. Later privateers also sometimes turned their wartime assets into equally dubious peacetime activities.
In the War of 1812, for instance, the United States was certainly an inferior naval power. And while the early frigate battles against the British were thrilling victories that owed much to superior American ship design, they affected the balance of power not one whit. By 1814 the American Navy was bottled up in port, as was nearly all our commercial shipping.
Only the privateers were still contesting the seas—and doing a splendid job of it. British insurance rates skyrocketed that year, reaching as high as 30 percent of the value of the ship for voyages between Liverpool and Halifax, Nova Scotia. Even in the Irish Sea—British territorial waters—insurance rates were 13 percent. The Naval Chronicle , a semi-official British publication, reported that “the depredations committed on our commerce by American … privateers, has attained an extent beyond all former precedents.”
Again, the reason for this success was in large measure ship design. The Baltimore clipper, a lean, deephulled schooner that had originated in this country, made a nearly perfect privateer. Exceptionally fast, it was more than a match for the tubby merchant ships of the day. Equally important, it could also outsail anything it couldn’t outfight. And it could accommodate a very large number of men while being handled by very few. This allowed many of the men to be deployed as prize crews, sailing the captured ships into friendly ports to be sold along with their cargoes.
One of these privateers, the Prince de Neufchâtel , had a short, brilliant, and highly profitable career, one that might have been summoned from the vasty deep of Patrick O’Brian’s imagination, except that it happens to be true.
The Prince de Neufchâtel was built in New York in 1812–13 and was owned by a New York woman named Flory Charretton, whose son-in-law, J. Ordronaux, captained the ship. The Prince was 110 feet long, with only a 25-foot beam. Even in heavy seas she was capable of more than thirteen knots and under ideal conditions might have reached twenty, a breathtaking speed for a sailing ship.
The American government granted her owner a letter-of-marque (a license to operate as a privateer) on October 28, 1813, and she soon sailed for Europe, slipping into the French port of Cherbourg. Fitted out as a privateer there, she evaded the British blockade in March 1814 and quickly snapped up nine prizes in the English Channel. In June she took six more in as many days and spent the rest of the summer in European waters, capturing merchantmen and leading the Royal Navy a merry chase, easily outsailing no fewer than seventeen British men-of-war who pursued her. Altogether the Prince de Neufchâtel profited her owners and crew that summer to the tune of three million dollars, a great fortune by the standards of the day.
By September she had recrossed the Atlantic and, again running a British blockade, entered Boston Harbor for a refit. Soon back at sea, the Prince de Neufchâtel was becalmed off Nantucket in early October with a prize in company (and more than two hundred thousand dollars in booty in her hold) when a British frigate, the Endymion , sighted her. Had the Endymion been able to bring her vastly greater armament to bear, she would have made short work of the Prince de Neufchâtel . But after she gave chase, she, too, was becalmed.
Shortly after dark, the Endymion launched a cutting-out expedition, loading her five ship’s boats with 111 men, perhaps a third of her crew, in order to surround and capture the privateer. Although the Prince could carry as many as 150 men, so many had been detailed as prize crews that there were only 37 men on board fit to fight.
But while outnumbered three to one, Captain Ordronaux vowed to blow his ship up rather than surrender, and his crew fought with extraordinary ferocity. Theodore Roosevelt, in his utterly splendid The Naval War of 1812 , described the “desperate and bloody struggle”: “Men fought like wild beasts and grappled with each other in deadly embrace. Knives, pistols, cutlasses, marlin spikes, belaying pins—anything that could deal an effective blow—were in requisition, while even bare fists, fingernails, and teeth came into play.”
The battle was over in twenty minutes, when the surviving British called for quarter and were taken prisoner. Of the five attacking boats, one was sunk, three adrift beyond recovery, and one was captured. The British losses were 33 killed and 37 wounded, and 30 made prisoners; only 11 escaped. Of the Prince de Neufchâtel ’s crew of 37, 7 were killed and 24 were wounded, 15 severely. Only 6 able-bodied sailors were left to handle the ship. Regardless, Ordronaux was able to land his prisoners and wounded on Nantucket and make it back to Boston safely with his prize and booty intact.
A few months later, under a different captain, the Prince de Neufchâtel was captured when she encountered three British frigates in a fierce storm and lost a spar trying to escape. So impressed was the British commander with the Prince that he ordered her to England to have her lines taken off. Unfortunately, when she was refloated in dry dock, she hung up on the sill of the dock gates and broke her back.
But if the Prince de Neufchâtel came to an early end after a glorious career, many of her sister privateers survived and entered a far less glorious form of enterprise after the war. For alas, the very qualities that made them successful as privateers—great speed and the ability to hold large numbers of human beings—made them all too useful as slavers.