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Pirate captains are not worth much and surprisingly you will lose honor for turning them into the governor. For the pirates, you can go to your cabin and then go to the hold and see them walking around. You can talk to them and tell them to join you. I usually use them as cheap vangards. Don't expect much in terms of loyalty and they will probably leave you soon.
You will also get more money if you ransom a nation captain to a governor of his own nation.