In the Spring of 1778, the only British warship off the coast of North Carolina was the frigate HMS Ariel, and she patrolled between Cape Hatteras and Cape Lookout. In two months, her crew captured six vessels, while two others were burned by their crews to avoid being taken. The Ariel left North Carolina in June with no other British ships to return until 1780.

On April 4th, a seemingly well-recognized sloop came into Ocracoke bar and anchored. When the local pilots boarded the ship they discovered that it was really a British privateer from St. Augustine.

The captain told the pilots that they would help carry the ship over the bar to attack a French merchant ship and a brig. If the pilots refused then they would be shot - so, they were compelled to comply. The British privateer seized one hundred hogsheads of tobacco from the French ship and then captured a Bermuda sloop loaded with salt.

After this strange event, the state of North Carolina purchased a large row galley named the Caswell. After many months the new galley was outfitted and manned with 145 men for the protection of commerce passing near Ocracoke. Along with the Caswell, batteries were placed at Ocracoke Inlet and Cape Lookout Bay. The Caswell lasted for about a year, and then sunk due to being worm-eaten.