The leaders of Great Britain express new reluctance to recognize Confederate independence, and Emperor Napoleon III of France proposes foreign mediation between the two warring factions.
As news of the Federal setbacks travels overseas, the European powers begin to seriously consider mediating an end to the war and recognizing Confederate independence.
Federal forces effectively suppress the Sioux uprising of 1862 by driving much of the tribe out of Minnesota.
U.S. officials protest the construction of a ship at Liverpool that escapes British jurisdiction and later becomes the feared commerce raider C.S.S. Alabama.
Confederates try to curry favor with France, and Great Britain suffers a severe economic downturn due to the lack of southern cotton.
The government of Great Britain receives the official news that the U.S. would release Confederate envoys James Mason and John Slidell, thus averting an international crisis.