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As the story goes, back in the 1600s a British ship was at anchor awaiting its new captain's arrival. A man in uniform came aboard, announced that he was the new captain, ordered the men to set sail, and he navigated the ship to a port in Holland, which was at that time at war with Britain. Turns out that the guy claiming to be the new captain was a spy.
Ever since then, the process of assuming command has been more formal. The new captain must show his orders, and read his orders aloud to the assembled crew.
In our more modern era, it gives and opportunity for a ceremony, and some speeches, and for the new captain to make clear to his crew what he expects them to do. It's also a great excuse for a party, and in the Navy at least, to have some champagne at the C.O.'s expense.
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