Frugal Use of Resources in Privateering: How Dominique You Got His Start
Letters of marque were granted by governments to successful privateers, because this was an economical way to engage in war without a heavy outlay — and without burdening the populace with either taxation or conscription.
In privateering, the profit motive required that every expenditure on equipment should ultimately result in a return on investment that would justify it. Because of this, it was not enough to win a battle — It was necessary to do so while expending less than was gained in the exploit. Privateers, unlike regular navy ships, were required by market forces to engage in frugal use of resources and to use good business practices while plying their trade.
While some privateering outfits had financial investors who shared in the profits and were not involved in the day to day operations of the privateer, smaller privateering operations were run directly by those who invested the money in the venture, and the profits were shared by the officers and crew alone. Enterprising young men with the skills and courage required could expect to earn a handsome living with a minimal investment.
Regardless of who the real author of “The Journal of Jean Laffite” may have been, his accounts concerning the business end of being a privateer do shed some light on the issue of how it was possible to earn a living while waging war as a private individual, despite the fact that most governments went into debt when they engaged in war.
The author describes how his elder brother Alexandre, (later known as Dominique You), prepared for his first outing as a privateer. Alexandre was the son of a tanner, and neither his father nor his grandmother encouraged him in his plans to become a privateer. However, he did receive training in the martial arts and in sailing and navigation from his great uncles who were independent corsairs.
The Journal of Jean Laffite describes how Alexandre refurbished a run-down ship that would not even hold water and brought it to the point when it was just barely seaworthy. He then assembled a crew and stealthily sailed out on his first run as a privateer.
Despite the disapproval of his father, Alexandre put on a brave air, sang a sea chanty and sailed off stealthily in the middle of the night, because he still did not have a license to do what he was doing — and no investor would likely have gambled on him at this early stage in his career.
When Alexandre returned, he had captured two fine vessels even though his own ship sank. The first thing he did was to present himself at the local bank, where an appraisement was made of his prizes, and he soon obtained enough cash to buy a better ship and had enough prestige to secure a privateering license. From this small story, we are afforded a glimpse into the financial side of privateering, and how it was possible to have a rags to riches — or rags to respectability transformation overnight.
.We learn from this story how little of an investment was required in order to get started in the privateering profession, but we also learn a little about profitability in general . It was true that Alexandre was motivated to take a risk on a vessel that was hardly seaworthy, because he was young and brave and strapped for cash. But consider what might have happened had he invested a great deal more in a better ship that may not have sunk, but might have sustained damage that would have required expensive repairs. A more solidly built vessel might have been less maneuverable and harder to ditch without regret. In later years, an established privateer may command a fleet of ships, but he can never afford to spend on them what a government might on its fleet, because he has to keep in mind the profit margin. The privateering business model puts severe limitations on spending, because the greater the investment,, the smaller the return.
The reason many countries once issued privateering licenses or letters of marque rather than investing more money in fleets of their own was that privateers were able to achieve useful military objectives without burdening the treasuries of the nations they served. When privateering went into disrepute and all privateers became conflated with pirates, the price of waging war went up. The people shouldering the burden of that heavier price were ordinary citizens who ended up being conscripted and taxed to pay for services to their country that privateers used to provide willingly and free of charge..