History: Pirates Are Pirates But...

... the coasts of Cuba, Porto Rico, St. Domingo and the Spanish main were the resorts of merciless freebooters who plundered and burned vessels with impunity, and frequently murdered the passengers and crews, after inflicting upon them the most shocking brutalities.

If you're thinking the above was written about men like Francois L'Olonnais or Edward Teach, think again. Thus wrote David Dixon Porter in his memoir of his father David Porter and he was speaking about piracy in the Gulf of Mexico and the Caribbean in the 1820s. I've talked about about Porter's Mosquito Fleet and his clean up of the last Caribbean pirates before, but something has come to my attention that puts a new spin on the similarities between the pirates Porter took out and the problems modern shipping faces in the Gulf of Aden. First, the history.

By 1819 the Revolutionary states of South America had all but ceased to award commissions to their privateers. Though some of these men, like Renato Beluche, turned away from the trade and became part of legitimate navies, others went on the account. Their depredations increased to a point where Spanish, French and particularly U.S. merchants (who carried a lot of hard money to and from banks in the U.S. and South America) were not safe. Demands for U.S. Navy escorts escalated and the navy was all for it; a ship brought safely to port would often pay a percentage of the specie on board to the officer in charge of the escort. The last straw came when U.S. and European insurers of cargo ships - Lloyd's of London in particular - began raising their rates. By the date in question, insurance premiums were double and rising to triple what they had been during the War of 1812. The public - and merchant seafarers - clamored to their government for immediate redress.

It may come as a surprise to some of Triple P's readers that the U.S. government took swift action. In February of 1819, Congress passed a bill with the long-winded title "An Act to protect the commerce of the United States and to punish the crime of piracy." President Monroe signed it into law March 3rd. The navy was unleashed to convoy merchant or passenger vessels that might request help and to use any and all force as necessary. Within a year, Commodore Porter was setting up shop on Thompson's Island (now Key West) with his squadron of small, shallow draft ships. Piracy in the area was virtually unheard of by 1825.
Fast forward to the present day and this article from BusinessInsurance.com via the First Mate frighteningly entitled Pirate attacks sink premiums as insurers leap aboard.

Rather than increasing premiums in a time when piracy is not only escalating in the Gulf of Aden but spreading out into the Indian Ocean thanks to larger, better equipped mother ships, marine insurance carriers are engaging in a price war. Effectively, the increase in pirate attacks with their resulting ransom demands has brought more insurers into the business and lowered what is known as kidnap and ransom (K & R) insurance premiums.

As the article notes, the insurance covers "... the ransom of the ship and its crew, including negotiations with pirates and hiring of ex-special forces teams to deliver the money." Since the pirates return vessels with little or no damage more often than not, the K & R insurance - and it's handy affordability - makes hijackings and the resulting ransoms a simple cost of doing business. No higher costs to consumers, no screeching public, just sailors at the mercy of pirates.

The problem as I see it is threefold. First, the pirates - as is noted in the article - are "encouraged" by the ease of the process. Capture a ship, get the ransom, go out and do it again. Second, the insurers are slitting their own throats by lowering premium on a risk that their actions encourage. Finally, and perhaps most importantly to me, sailors are being put in harms way and treated as expendable commodities. As the article notes, there are currently 379 hostages being held by Somali pirates, most of them merchant sailors. That speaks for itself.

I understand that the rules have changed along with the times. But once in a while I wonder what that U.S. Congress, President and Navy of 1819 would have done if they were suddenly in charge of our current situation. Not to mention Lloyd's of London.