Battle Over Treasure Wreck Mercedes

By James Donahue

If ever there was a treasured shipwreck to be find it had to be the Nuestra Senora de las Mercedes, a Spanish frigate sunk in a battle with British warships off the coast of Portugal in the Battle of Cape Saint Mary in 1804.

The Mercedes was sailing to Spain from Lima, Peru, a former Spanish colony, with 16 tons of gold and silver coins, worth an estimated $500 million in today’s currency, in its holds when it engaged in a sea fight with the British. A well-placed British shell struck the frigate’s explosives and the Mercedes blew up, killing an estimated 200 sailors and sinking the vessel.

Divers for Odyssey Marine Exploration found the wreck in 2007 and recovered 574,553 silver coins and 212 gold coins which were taken to a company warehouse in Tampa, Florida.

When news of the fabulous discovery leaked, it triggered a four-year-long legal battle in international courts between Odyssey, the Spanish Government and even the Peru Government over just who owned the treasure. When it comes to a fortune in treasure like that, the old unwritten law of finders-keepers on the open sea no longer applies.

Spain claimed the Mercedes carried 36 guns and was technically a warship, and sunk in a battle at sea. International treaties hold that warships sunk in battle are protected from treasure hunters. Odyssey, which identified the wreck only as The Black Swan, argued that the wreck was never positively identified as the Mercedes. Also company lawyers argued that the ship was on a commercial trade trip at the time it was sunk.

It was a long and fierce court battle. Spanish government lawyers painted Odyssey as modern-day pirates. In the end, the courts agreed and awarded the entire treasure to Spain. Odyssey said in earnings statements that it spent $2.6 million in salvaging, transporting, storing and conserving the treasure.

Before the court proceedings were concluded, the Peruvian government attempted to block the transfer of the treasure back to Spain. Peruvian lawyers argued that even though Peru did not gain its independence until 1824, the colony was the South American seat of the Spanish crown when the ship sank. The silver and gold coins were mined and minted in Peru.

Finally, by February 2012, a U. S. federal court and a panel from the U. S. Court of Appeals upheld the Spanish claim to the treasure.

So what happened to the treasure that? It was flown from Tampa to Madrid in two Spanish military C-130 Hercules transport planes. There it was trucked under heavy motorcycle escort to the Ministry of Culture and placed in a vault.

Even though Spain is caught up in the European financial crisis, the money is not going into the nation’s treasury. Guillermo Corral, a cultural attaché at the Spanish Embassy in Washington said the treasure will go to museums and remain protected as a national treasure.

"We don’t think of it as money; to us, it’s part of our cultural heritage," Corral said. "Spain has very strict laws protecting its patrimony, so none of the coins can be sold or melted down."

The Mercedes treasure is believed to be the largest collection of coins ever excavated from a single deep-ocean site.

The Mercedes was launched in Havana, Cuba, in 1786. It was a standard sailing frigate of that era. The name Nuestra Senora de las Mercedes translated to English means Our Lady of Mercy.

The Mercedes was one of a squadron of four Spanish frigates laden with gold and silver, under the command of Brigadier Don Jose de Bustamante y Guerra, bringing treasure to Spain. The British were not at war with Spain at the time, but they knew of a secret pact Spain had with France and that Spain would likely declare war after the treasure ships arrived.

Thus Bustamante’s ships were met off the Portuguese coast by a British squadron, under the command of Commodore Graham Moore, commanding the 44-gun HMS Indefatigable, with orders to intercept the treasure ships and take them peacefully, if possible.

The Spanish refused to surrender and opened fire on the fleet of British ships under Moore’s command. The Mercedes was sunk and the other three Spanish frigates, the Medea, Fama and Lively, were captured and taken to England.

The Spanish government declared the incident an act of piracy and declared war against England. The Spanish navy suffered a catastrophic defeat less than a year later at the Battle of Trafalgar in October, 1805. But Napoleon, who had crowned himself Emperor of France that year, gained Spain as an ally in his war against Britain.