The Royal Navy had always taken 'Prizes' from enemy war fleets, and also from enemy and allied mercantile vessels, not to mention lucrative cargoes from innocuous vessels! Better in the British coffers, supporting the cost of wars, or not, was the eternal message issued from the Admiralty, and commanding officers were only too willing to oblige.  Nelson himself earned a tiny sum drawing prize-money in addition to his salary and command pay, table money, and everything else he rightly and richly deserved.

Whilst the written orders were unsophisticated, almost naive in their simplicity, admirals and captains played it their way when upon the high seas and there were no or very few witnesses.  Every prize they took helped to line the pockets of senior officers, although every  member of the crew profited in some way or other, albeit by a paltry amount for those at 'the bottom of the ladder'!

Each onset of a war involved a re-write of the instructions and several were issued between the war of the Glorious First of June [1894] and the war of 1812 taking into account the French Revolutionary Wars, the Napoleonic Wars and the war with America, which were followed by Crimea, wars in the middle east and far east, not to mention in Asia, particularly in India; two Boer wars, with a major re-write in 1914 for WW1.

Then came a change in frequency of re-writes brought about by an event nobody could foresee or make plans for taking prizes. When the German High Seas Fleet, then moored in the Orkney's at Scapa Flow, scuttled their vessel in the shallow waters of the sheltered harbour, prize money went ballistic.  With a few exceptions only,  every vessel was raised or refloated, broken up [sometimes in situ] the scrap sold off, netting the Admiralty coffers, ergo the pockets of members of the Royal Navy, at a pace unprecedented in all history.  The evolution was laboured and time consuming, but come the early 1922 period, the majority of officers and men had seen large payments [relative to their ordinary wages] of 'prize/salvage money' paid to them.  Moreover, post that event, much lesser amounts trickled through the pay-roll to delighted sailors. 

Whilst we often associate prize money with ships, as loosely defined above, WW1 officially introduced a new element into the calculation of prize money. After the Battle of Jutland in 1916 [with some retrospective reckoning for the earlier Battle of the Falklands in 1914] in which I say "The loss to Britain was slight, though any death brings profound grief to somebody, but the loss to Germany was immense [a huge hammer blow] both in lives and in ships, and its people never really did get over it. Their admiral died [Graf Spee]  and so too did his two sons plus another two thousand odd sailors and all their ships were destroyed.  It always amazes me that these losses are never factored into why the Germans hurriedly exited the Jutland sea area, for clearly her navy and the German people feared a repeat of what Admiral Sturdee had meted out to Admiral Count Von Spee less than two years previously! Fortunately for the Germans, Jellicoe didn't have the fire in his belly that Sturdee had in his!  The convention of 'prize money' could not be applied at either of the 1914/1916 battles because there were no ships left to seize or make gains on, so a new convention had to be considered. That convention considered human flesh, in this case dead German sailors, and knowing how many died and the price of each corpse, an amount of cash could be given to our naval sailors to share out as "prize money" - victory money if you want {?} but I myself wouldn't go down that path; I would guess at "blood money!"  Thus a new definition was born although it became short lived, namely take a German ship or a Germany life and to reward our own boys for the demise of each or either. In my series "ROYAL_NAVAL_AND_BRITISH_MARITIME_SNIPPETS" there are many stories of great naval interest, but here, if you care to look at No 5 viz reading from section 2C onwards you will learn of the addition to the British coffers of one dead German sailor and how that cumulative amount of money totalled a huge amount ready to be paid as Prize Money.

Of interest is a story I wrote about a stoker who served in both WW1 and WW2 called William John DEDMAN but always called Jack   This little pieces comes from his story:-

Now we come to another of my ready made pages, this time on PRIZE MONEY.

Jack received  three whacks of prize money.  The first line reads "Paid 15-00 Naval Prize Fund", the second read "Paid final share of Naval Prize Fund", and the last line reads "Paid supplementary Share of Naval Prize Fund".   The Naval Prize Fund filled its coffer with captured enemy ships/submarines which could be sold for scrap or sold on to non-enemy non-combatants as sea going units, plus an amount for dead Germans.  It was boosted to an unprecedented level when the surrendered German High Sea Fleet scuppered itself in Scapa Flow Scotland.  Nearly all the ships were raised and sold for scrap or used in the Royal Navy as viable fighting units. First world war sailors did well out of the Fund.

If you have a care, read also this story

In view of the Scapa Flow scuttling, the Naval Prize Manual was rewritten again in 1919, five years on from the 1914 Edition issued as a "CB3" = Confidential Book Number 3 = Naval Prize Manual for H.M. Fleet, and yet again in 1923 to pick up all the loose ends from the WW1 experiences of taking Prizes and the Prize Money pay out rules and percentages.

I have the full edition of the 1923 version which in effect is the version extant at the start of WW2 in 1939, with amendments from 1923 until pre WW2 included in the reprint of the Manual whose full title is "A Manual for the guidance of naval officers in time of war".  It was originally issued in the series of books called "OU" = Officers Use, but eventually downgraded to the "BR" SERIES = Book of Reference, specifically to BR 2074. It is a large book [manual] running to over 225 pages in all, and I have no intention, at any time, to  digitise all those pages.  It is hard work reading the detail which is clearly [and obviously] written by the hand of a legally minded person, a lawyer at least, but more probably an expert in the Geneva Convention rules and regulations.

However, to whet your appetite, I have copied the main indexes so that you can see the scope of the Manual, plus one or two other snippets, and for no real reason, arbitrarily, a selection of pages. viz, 87 to 89.