This is what everyone forgets. The British - and the French - governments were unable to go around examining every order - it would not have been tolerated in those days and would have required a large investigating team given the amount of Confederate contracts being issued. The thought of court actions against the government was also a real possibility given Confederate sympathy in some areas, although not generally. I am fairly certain that the reverse applied too - 'rumours' that were circulating were passed on to the US Embassy who then investigated. That is how the Laird Rams were 'discovered'.
In the case of the Laird Rams, it was a rather blatent act against the spirit of the terms of neutrality by a ship builder with Confederate sympathies in an area with Confederate sympathies (Liverpool). In January 1863 the Foreign Secretary, Lord Russell, after notification from the US ambassador, told James D. Bulloch, a naval agent for the Confederacy, who had ordered the ships in his own name, that the ships would be seized if they were doing so to form part of the fleet of a nation currently at war. Bulloch therefore had the Laird firm "sell" the rams to a French group called Bravay and Company and make it look like they were taking the ships in the name of the Pasha of Egypt in June 1863, nominally on behalf of the Egyptian government, with the intention of transferring them to the Confederate flag once they were at sea. The Khedive was attempting to acquire warships, so this was superficially plausible. In September 1863, one was about to start sea trials when instructions were issued to the Liverpool Collector of Customs that they were not to leave the graving dock (where a ship was fitted out) and a guard ship,
HMS Majestic, posted to prevent any sea trials.
The language used in any description of these inter government communications are a little OTT with rumours of Lincoln determined to send the USN into British Waters to destroy them and the US Ambassador 'fuming' with government incativity. I have to say it seems very anti-British, but that was the Union at the time. There is little said about the French contracts. The British government were well aware that it could have gone to civil court and their actions curtailed. The Confederates knew they were playing one against the other which could only be to their advantage.
The French were subject to the same excuses and reasoning but it was a little more devious. In June 1863 (
remember?), John Slidell, the Confederate commissioner to France, asked Emperor Napoleon III in a private audience if it would be possible for the Confederate government to build ironclad warships in France. Arming ships of war for a recognized belligerent like the Confederate States would have been illegal under French law, but Slidell and his agent, James D. Bulloch
(yes, the same one!), were confident that the Emperor of France would be able to circumvent his own laws more easily than other potential secret contractors. Napoleon III agreed to the building of ironclads in France on the condition that their destination remain a secret. Arman Brothers in Bordeaux (the company went bankrupt in 1868) were building the ships, but the government initially accepted that it really was for a foreign navy (Egypt) contract.
Prior to delivery, however, a shipyard clerk walked into the U.S. Minister's office in
Paris and produced documents which revealed that Arman had fraudulently obtained authorization to arm the ships and was in contact with Confederate agents. The two French ships were nearing completion when the British ones were seized and the French government panicked and ordered their immediate sale to European Navies in early 1864 - the two obvious ones being Prussia and Denmark, then head-to-head in the 2nd Schlieswig War.
Bringing the