Rarely mentioned as a decisive deterrent to Anglo-French recognition of Southern independence was the presence of Russian fleets in San Francisco and New York from September 1863 through March 1864. Both the Czar and Lincoln freed serfs and slaves while crushing independence movements in Poland and the American South.
Bernhard Thuersam, Chairman
North Carolina War Between the States Sesquicentennial Commission
"Unsurpassed Valor, Courage and Devotion to Liberty"
"The Official Website of the North Carolina WBTS Sesquicentennial"
British and French Mediation Considered
"Ultimately the South's hopes for independence marched with its armies, and indeed when the Army of Northern Virginia invaded Maryland in the fall of 1862, [British Lords] Palmerston and [John] Russell became convinced of the depth and potential of Southern separation.
On September 14, Palmerston wrote to Russell about Anglo-French mediation and "an arrangement upon the basis of separation." Russell responded, "I agree with you that the time has come for offering mediation to the United States Government, with a view of the recognition of the Independence of the Confederates – I agree further that in case of failure, we ought ourselves to recognize the Southern States, as an independent State."
In accord with these convictions, Russell informally approached his counterpart in Paris, Antoine Edouard Trouvenel, and discussed with Palmerston a date for a meeting of the cabinet to approve the mediation scheme. Russell was still firm in this policy on October 4, when he wrote Palmerston, "I think unless some miracle takes place this will be the very time for offering Mediation."
And on October 7, Chancellor of the Exchequer William Gladstone let the cat out of the bag. Speaking at Newcastle, Gladstone affirmed, that, "Jefferson Davis and other leaders of the South have made an army; they are making, it appears, a navy; and they have made what is more than either, they have made a nation."
Then, just a quickly as the mediation enthusiasm had developed in England, it evaporated. [Though as important as the Sharpsburg battle and Lincoln's abolition proclamation] were, other considerations contributed to England's return to nonintervention. Mediation was attractive to free-traders who resented the Federal blockade, to liberals who supported self-determination, to conservatives who felt a kinship with landed aristocrats in the South, and to some varieties of nationalists who looked with favor upon the dissolution of the United States.
But these attractions were essentially abstract. In the end British statesmen had to face the hard reality of what might follow an unsuccessful offer of mediation and subsequent recognition of the Confederacy: they had to ponder the consequences of a North American war. And if the British should be drawn into an American war, they wanted to support the winning side. In this regard, [Sharpsburg] and abolition] were indecisive; neither event broke the American impasse to reveal a victor."
(The Confederate Nation, 1861-1865, Emory M. Thomas, Henry Steele Commager & Richard B. Morris, editors, Harper & Row, 1979, pp. 179-180)