This is indeed a fascinating story.

I recommend The Rebel Raiders, by James Tertius DeKay, as well as Men and Ships of the Civil War, by Scott Rye, to anyone serious about this question--both informative but not dry.

Crux of the problem was the interpretation of the Foreign Enlistment Act of 1819. This Act made it illegal for any British subject to sell a ship to a foreign belligerent if that ship was to be used against a state with which Britain was at peace.

But James Bulloch , the resourceful Confederate agent, found a solicitor who came up with the idea that as long as the ship's guns were not installed, a British shipyard was free to build warships for the South.   So Bulloch had the guns installed outside the 3-mile limit.

(Therefore the line from "The "Alabama": "While Liverpool fitted her with guns and men" is strictly speaking, not true.)   In fact Raphael Semmes had to be quite persuasive to convince half of the men who had sailed out of Liverpool to sign on with him--the main problem being the fact there would be no prize money until the South won the war.

Not only did the British government let the ship which became the Alabama slip out from Liverpool, but also the future Shenandoah.   And two ironclads--called the "Laird rams" were also built in the UK--and almost made it out. After all, "papers at the Laird works showed convincingly that they were owned by a French firm" (DeKay p 162)--supposedly built for the pasha of Egypt to patrol the Nile.

When the news of Chancellorsville and Lee's move into Maryland and Pennsylvania reached Britain, Gladstone proclaimed that the restoration of the US union was no longer possible. Palmerston said explicitly that the Union no longer existed.

"Naval experts, not only in the United States, but in Britain, were convinced that the Laird rams could break the blockade." ...."Adams knew that the Lincoln cabinet was so afraid of the rams that it was seriously considering the possibility of flouting Britain's self-styled "neutrality" and sending a squadron of US Navy steamers up the Mersey", guns blazing, to destroy the rebel ships at anchor Such a move would unquestionably mean war with Britain" (DeKay p 163).    Adams even mentioned the word "war" in a letter to Russell--after Russell had yet again refused to seize the rams.

Only this prospect convinced the Palmerston government to stop the rams from leaving the UK.

And this was after the Emancipation Proclamation, which was announced in late 1862---, after the North could finally claim a victory (Antietam)-- to take effect 1 Jan 1863. So the Proclamation in itself did not solve the problem.

This is not even touching the subjects of the cotton trade, attitudes of educated Britons toward the North, and the Alabama Claims. The topic is far too rich to deal with in one post.

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