The Barbary Pirates Ver3
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The Barbary Pirates Ver3

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PPT based upon Barbary Pirates Case involving two former US presidents.

PPT based upon Barbary Pirates Case involving two former US presidents.

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    The Barbary Pirates Ver3 The Barbary Pirates Ver3 Presentation Transcript

    • The Barbary Pirates
      Abhishek
      Anshuman
      Rajul
      Sharad
      Srinivas
      Suket
      1
    • End of 18th Century
      USA has no Navy Fleet
      No Protection from British
      Economy Improving
      Debt Still There
      2
    • Year: 1786, The NegotiatorsJohn Adams Thomas Jefferson
      USA Ambassador to France
      Against Peace with Pirates
      ToNegotiate with Barbary States
      Leading USA Diplomat to UK
      Wants to set up Naval Fleet
      To Negotiatewith Barbary States
      For Peace with Pirates
      Againstsetting up the fleet
      3
    • Adams Says War Is Costlier than Peace
      Potential Trade Revenue Loss
      More than (500,000 ) £ per year
      Option 1: Peace
      Cost 200,000 to 500,000
      As 10,000 to 30,000 annual interest considered @ 6%
      Option 2: Prepare & Go for War
      At least 500,000 even when no fight
      200,000 to 500,000 additional if fight
      Assumed as one time cost!
      This is recurring cost.
      Assumed as recurring cost!
      This is one time cost.
      Not Apple to Apple Comparison
      4
    • Jefferson ArguesBuilding Fleet is Must &not that Costly
      Assumed as one time cost.
      Not used for comparison.
      Splits costs of war
      Fixed vs. Variable
      Fleet Set Up cost – 450,000
      MUST be done anyway
      Additional Cost – 22,500 per year
      As half the fleet kept in service
      Only variable costs should be compared
      Cost to Fight not considered.
      Only maintenance taken.
      Cost of WarNOT Considered.
      5
    • Our Calculation
      Cost of Peace
      200,000 to 500,000 annual (recurring)
      350,000 Average annual (recurring)
      Cost of War
      450,000 one time fleet set up (FC)
      22,500 to 45,000 maintenance every year (recurring)
      350,000 whenever fight (recurring with probability of war)
      One win may decimate pirates for many years
      6
    • Our Take
      Set up Fleet
      One time cost of 450,000
      Maintenance cost of up to 45,000
      Go for war once
      350,000 average
      Reduce bargaining power of Pirates
      Settle for peace
      200,000 per year or less maybe
      7
    • This was 1786.What Happened Thereafter?
      War?
      Peace?
      Adams? Jefferson?
      8
    • Jefferson Stuck to His Argument
      Paying ransom
      NOT a sustainable solution
      Barbarian states
      MUST feel the threat
      9
    • Navy Gets Formed
      With some delay
      In 1794
      With 6 battle carriers
      10
    • John Adams?
      BecomesPRESIDENT of USA
      In 1797
      Remains till 1801
      And Keeps on paying
      The Ransom every year
      11
    • 12
      Jefferson
      USA President
      1801-09
    • Jefferson Stops Ransom Payment
      Refuses Tripoli’s demand
      of an immediate payment
      of $225,000
      and
      an annual payment
      of $25,000
      13
    • Initiates War with Pirates
      Orders NAVY to move & initiates WAR
      Alliance of Barbary states breaks
      1st War ends in 1805
      Ransom of 60,000 per sailor continues
      2nd War held in 1815
      No ransom thereafter!
      14
    • Thank You !!!
      15