>>>However, since Britain was not yet at war with Spain (war was declared shortly thereafter), the crews were denied their rightful prize money and the treasure from the captured vessels reverted to the British crown.
CS Forrester wrote of this incident in one of his stories of Horatio Hornblower. In this version it was Captain Hornblower’s honorable decision to forego his opportunity for wealth as part of the prize-taking squadron that led to the British victory. Hornblower sailed into combat keeping Spanish reinforcements away but being over the horizon, would be ineligible for a share of the loot. Then of course, there was no prize money anyway as stated.
Patrick Obrian puts Captain Jack Aubrey in command of one of the intercepting frigates as well, but relates how Aubrey and the other Captains are deprived of their prize money. The Naval Chronicle provides interesting contemporary accounts of this incident. Prize money was an important factor motivating both officers and foremast jacks to advance the cause of Britain and the Royal Navy.