While there was complicity with certain British officials revolving around the Alabama and a few other warships, this simply is incorrect when it came to the sales of small arms and ammunition. Payment for the contraband was made to the private firms that manufactured the arms and they were transported on private ships. The only involvement the British government had with the shipment of small arms to either belligerent was a stern warning that "you were on your own if you got caught" as spelled out in the final paragraph of Queen Victoria's May 13, 1861 Proclamation of Neutrality (my bold):
Now, in order that none of our subjects may unwarily render themselves liable to the penalties imposed by the said statute, we do hereby strictly command that no person or persons whatsoever do commit any act, matter, or thing whatsoever, contrary to the provisions of the said statute, upon pain of the several penalties by the said statute imposed, and of our high displeasure. And we do hereby farther warn all our loving subjects, and all persons whatsoever entitled to our protection, that if any of them shall presume, in contempt of this our royal proclamation, and of our high displeasure, to do any acts in derogation of their duty, as subjects of a neutral sovereign, in the said contest, or in violation or contravention of the law of nations in that behalf; as for example and more especially by entering into the military service of either of the said contending parties as commissioned or non-commissioned officers or soldiers; or by serving as officers, sailors, or marines on board any ship or vessel of war or transport, of or in the service of either of the said contending parties; or by serving as, officers, sailors, or marines on board any privateer bearing letters of marque of or from either of the said contending parties ; or by engaging to go or going to any place beyond the seas, with intent to enlist or engage in any such service, or by procuring or attempting to procure, within her Majesty's dominions at home or abroad others to do so; or by fitting out, arming, or equipping any ship or vessel to be employed as a ship of war or privateer or transport, by either of the said contending parties; or by breaking or endeavouring to break any blockade lawfully and actually established by or on behalf of either of the said contending parties; or by carrying officers, soldiers, despatches, arms, military stores, or materials, or any article or articles considered and deemed to be contraband of war according to the law or modern usage of nations, for the use or service of either of the said contending parties, all persons so offending will incur and be liable to the several penalties and penal consequences by the said statute, or by the law of nations,in that behalf imposed or denounced. And we do hereby declare that all our subjects, and persons entitled to our protection, who may misconduct themselves in the premises, will do so at their peril and of their own wrong, and that they will in no wise obtain any protection from us against any liabilities or, penal consequences, but will, on the contrary, incur our high displeasure by such misconduct.