Early in 1861 there sprang up in England a thriving trade in arms and munitions of war. While the cotton spinners of Lancashire were suffering from the loss of their usual supply of raw material, owing to the blockade of the ports of the Confederacy, the merchants of Liverpool were turning their attention to supplying the belligerants with the equipment necessary for the continuance of the conflict. Sales were made directly or indirectly to the Federal government, but the higher prices offered in the South tempted many to engage in the more hazardous traffic with the government at Richmond. As the blockade gradually became more efficient, insurance companies refused longer to take the risk of loss on Southern commerce. But it still went on. The owners of a blockade runner were certain of enormous profits if they could succeed in getting through the lines, but, if captured, both vessel and cargo were confiscated by the Federal prize courts. The sleepy little village of Nassau in the Bahama islands awoke to find itself a great commercial emporium, and immense quantities of goods were soon collected there, awaiting transshipment within the Confederate lines. According to the law of nations, vessels of neutral countries were not subject to seizure, unless actually attempting to run the blockade. Consequently, ocean steamers could land their cargoes at the English port of Nassau without danger, while smaller vessels, having less draught than the Federal war ships, could make the short run to the coast with better chances of escape. Liverpool was the principal European depot for this traffic, as Nassau was its principal depot on this side of the Atlantic. In the spring of 1862 Confederate agents in England were still talking about the "paper blockade," but English merchants whose goods were piled up at Nassau found the blockade much more real than it had been represented to be. Their anxiety was somewhat lessened by the circulation of rumors that the blockade was shortly to be raised. Confederate vessels of war were to make an opening in the encircling fleets, and the blockade was to become so lax that it would no longer be recognized by European governments. Eventually these prophecies became tangible enough to connect themselves with a certain mysterious vessel which was at that very time lying in the Mersey awaiting her masts and rigging. Charles Francis Adams was the United States minister to England, residing at London. The suspected character of the vessel was communicated to him by Thomas H. Dudley, the United States consul at Liverpool, and a strict watch was kept upon her.