the Union Navy seized a blockade runner, the ship and cargo were condemned as a prize of war and sold, with the proceeds given to the Navy sailors; the captured crewmen were mostly British, and they were released. Economic impact The Southern economy nearly collapsed during the war. There were multiple reasons for this: the severe deterioration of food supplies, especially in cities, the failure of Southern railroads, the loss of control of the main rivers, foraging by Northern armies, and the seizure of animals and crops by Confederate armies. Most historians agree that the blockade was a major factor in ruining the Confederate economy; however, Wise argues that the blockade runners provided just enough of a lifeline to allow Lee to continue fighting for additional months, thanks to fresh supplies of 400,000 rifles, lead, blankets, and boots that the homefront economy could no longer supply. Surdam argues that the blockade was a powerful weapon that eventually ruined the Southern economy, at the cost of few lives in combat. Practically, the entire Confederate cotton crop was useless (although it was sold to Union traders), costing the Confederacy its main source of income. Critical imports were scarce and the coastal trade was largely ended as well. The measure of the blockade's success was not the few ships that slipped through, but the thousands that never tried it. Merchant ships owned in Europe could not get insurance and were too slow to evade the blockade, so they stopped calling at Confederate ports. To fight an offensive war, the Confederacy purchased ships in Britain, converted them to warships, and raided American merchant ships in the Atlantic and Pacific oceans. Insurance rates skyrocketed and the American flag virtually disappeared from international waters. However, the same ships were reflagged with European flags and continued unmolested. After the war ended, the U.S. government demanded that Britain compensate them for the damage done by the raiders outfitted in British ports. Britain acquiesced to their demand, paying the U.S. $15 million in 1871. Dinçaslan argues that another outcome of the blockade was oil's rise to prominence as a widely used and traded commodity. The already declining whale oil industry took a blow as many old whaling ships were used in blockade efforts such as the Stone Fleet, and Confederate raiders harassing Union whalers aggravated the situation. Oil products that had been treated mostly as lubricants, especially kerosene, started