It was now very plain to the Syndicate director that his words could have no effect upon the commander of the Lenox, and he therefore signalled Crab H to tow the United States vessel into port. When the commander of the Lenox saw that his vessel was beginning to move backward, he gave instant orders to put on all steam. But this was found to be useless, for when the dynamite gun was about to be fired, the engines had been ordered stopped, and the moment that the propeller-blades ceased moving the nippers of the crab had been released from their hold upon the stern-post, and the propeller-blades of the Lenox were gently but firmly seized in a grasp which included the rudder. It was therefore impossible for the engines of the vessel to revolve the propeller, and, unresistingly, the Lenox was towed, stern foremost, to the Breakwater.

The news of this incident created the wildest indignation in the United States navy, and throughout the country the condemnation of what was considered the insulting action of the Syndicate was general. In foreign countries the affair was the subject of a good deal of comment, but it was also the occasion of much serious consideration, for it proved that one of the Syndicate's submerged vessels could, without firing a gun, and without fear of injury to itself, capture a man-of-war and tow it whither it pleased.

The authorities at Washington took instant action on the affair, and as it was quite evident that the contract between the United States and the Syndicate had been violated by the Lenox, the commander of that vessel was reprimanded by the Secretary of the Navy, and enjoined that there should be no repetitions of his offence. But as the commander of the Lenox knew that the Secretary of the Navy was as angry as he was at what had happened, he did not feel his reprimand to be in any way a disgrace.

It may be stated that the Stockbridge, which had steamed for the open sea as soon as the business which had detained her was completed, did not go outside the Cape. When her officers perceived with their glasses that the Lenox was returning to port stern foremost, they opined what had happened, and desiring that their ship should do all her sailing in the natural way, the Stockbridge was put about and steamed, bow foremost, to her anchorage behind the Breakwater, the commander thanking his stars that for once the Lenox had got ahead of him.

The members of the Syndicate were very anxious to remove the unfavorable impression regarding what was called in many quarters their attack upon a United States vessel, and a circular to the public was issued, in which they expressed their deep regret at being obliged to interfere with so many brave officers and men in a moment of patriotic enthusiasm, and explaining how absolutely necessary it was that the Lenox should be removed from a position where a conflict with English line-of-battle ships would be probable. There were many thinking persons who saw the weight of the Syndicate's statements, but the effect of the circular upon the popular mind was not great.

The Syndicate was now hard at work making preparations for the grand stroke which had been determined upon. In the whole country there was scarcely a man whose ability could be made available in their work, who was not engaged in their service; and everywhere, in foundries, workshops, and shipyards, the construction of their engines of war was being carried on by day and by night. No contracts were made for the delivery of work at certain times; everything was done under the direct supervision of the Syndicate and its subordinates, and the work went on with a definiteness and rapidity hitherto unknown in naval construction.

In the midst of the Syndicate's labours there arrived off the coast of Canada the first result of Great Britain's preparations for her war with the American Syndicate, in the shape of the Adamant, the largest and finest ironclad which had ever crossed the Atlantic, and which had been sent to raise the blockade of the Canadian port by the Syndicate's vessels.

This great ship had been especially fitted out to engage in combat with repellers and crabs. As far as was possible the peculiar construction of the Syndicate's vessels had been carefully studied, and English specialists in the line of naval construction and ordnance had given most earnest consideration to methods of attack and defence most likely to succeed with these novel ships of war. The Adamant was the only vessel which it had been possible to send out in so short a time, and her cruise was somewhat of an experiment. If she should be successful in raising the blockade of the Canadian port, the British Admiralty would have but little difficulty in dealing with the American Syndicate.

The most important object was to provide a defence against the screw-extracting and rudder-breaking crabs; and to this end the Adamant had been fitted with what was termed a "stern-jacket." This was a great cage of heavy steel bars, which was attached to the stern of the vessel in such a way that it could be raised high above the water, so as to offer no impediment while under way, and which, in time of action, could be let down so as to surround and protect the rudder and screw-propellers, of which the Adamant had two.

This was considered an adequate defence against the nippers of a Syndicate crab; but as a means of offence against these almost submerged vessels a novel contrivance had been adopted. From a great boom projecting over the stern, a large ship's cannon was suspended perpendicularly, muzzle downward. This gun could be swung around to the deck, hoisted into a horizontal position, loaded with a heavy charge, a wooden plug keeping the load in position when the gun hung perpendicularly.