Napoléon wrote:+1 to CJ's formula and here is my reasoning: A happy and fat merchant provides more gold for and better targets for a pirate.
Yes the gold cap would drop to 150k, however look at it this way, with this reduction merchants will sail more fleets and carry more gold on hand. This gives more attacks to a pirate during a raid and way more capped hits at 150k. if it remains at 250k they carry less gold and your capped attacks are fewer.
Would you rather make 150k every hit for 10-15 hits or 250k for 5 hits? Not to mention the bonuses of game generated gold. CJ's formula is not more in favor of either side so much as it is a bonus to both.
This is from a privateers perspective.
People have already discussed your concerns, also.