The Barbary Pirates Ver3


Published on

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

Published in: Business
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

The Barbary Pirates Ver3

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