Despite being across the world from the conflict, the Australian colonies were affected by the American Civil War both economically and by immigration. The Australian cotton crop became more important to England, which had lost its American sources, and it served as a supply base for Confederate blockade runners. Immigrants from Europe seeking a better life also found Australia preferable to war-torn North America.
The Australian public was shocked by the revelation by a turncoat Russian officer, who claimed that a direct engagement was secretly planned by Russia in case the Confederacy was recognised by Britain. The Russian navy had just paid Australia a visit in preparation for launching attacks. Fear of a possible military confrontation led to a massive buildup of coastal defences and to the acquisition of an ironclad warship.
Australia became directly involved when the Confederate navy visited in order to repair one of their warships. This led to protests from the Union representative at Melbourne, while the citizenry of nearby Williamstown entertained the Confederates and some Australians joined the crew. Accounts disagree as to whether Australians generally favored the Union or the Confederacy, as sorrowful demonstrations were held in Sydney when news arrived of Abraham Lincoln's assassination.
Together, 140 Australians and New Zealanders were veterans of the American Civil War, 100 of whom were native-born. Some of these were originally Americans who came to Australia during the Victorian gold rush of the 1850s. Officers during the war included one who gave Tasmania its first telegraph service, and another officer who mined for gold in Ballarat.
Confederate blockade runners occasionally obtained supplies there, despite a historic fear of possible naval attack by Americans, a fear rooted in the actions of American privateers during the War of 1812.
The war also caused the Lancashire Cotton Famine. As a result, Queensland saw a rise in its cotton industry, while the National Colonial Emigration Society in Britain was founded, although it had little ongoing relevance. This came about as a result of so many individuals from northern England being affected by the inability of the Southern United States to ship cotton during the war. Once the war ended, little cotton from Southern Australia was imported to England. However, in the aftermath of the war some Australians were interested in acquiring the Fiji Islands and their cotton fields.
Another impact was the competition with Canada that Australia and New Zealand had with Irish immigration. The increasing Irish immigration was seen as an economic boon by these antipodean countries. One of the reasons for the increase was due to many Irish deciding against emigrating to the warring nations of North America.
Imperial Russian Navy
During the Civil War, the Union and Russia were allies against what they saw as their potential enemy, Britain. The Russian blue-water navy was stationed in San Francisco and from 1863 in New York—with sealed orders to attack British naval targets in case war broke out between the United States and Britain. This was threatened if Britain gave diplomatic recognition to the Confederacy.
The flagship of the Russian Pacific squadron, Bogatyr under Rear Admiral Andrey Alexandrovich Popov, officially made a friendly visit to Melbourne in early 1863. According to information passed on to Australian authorities in June 1864, Rear Admiral A.A. Popov had in the first half of the year 1863 received orders and a plan of attack on the British naval ships positioned near the Australian shore. The plan also included shelling and destruction of the Melbourne, Sydney and Hobart coastal batteries. The information was attributed to the Polish lieutenant Władysław Zbyszewski of the Bogatyr, who had deserted from service in Shanghai soon after Bogatyr left Australia, and found his way to Paris to join the Polish January Uprising. This information about Popov's plans was forwarded by a fellow Pole, a certain S. Rakowsky. Similar attack orders are known to have been given to the Atlantic squadron under Rear Admiral Lessovsky, that was sent to New York at the same time.
The CSS Shenandoah arrived in Australian waters on January 17, 1865. Off the coast of South Australia at 39°32'14"S and 122°16'52" E, her crew spotted an American-made sailing ship named the Nimrod and boarded it. Having ascertained it was an English ship, the Shenandoah left it alone.
On January 25, 1865 the Shenandoah made harbor at Williamstown, Victoria, near Melbourne, in order to repair damage received while capturing Union whaling ships. At seven o'clock in the evening, Waddell sent a Lieutenant Grimball to gain approval from local authorities to repair their ship, with Grimball returning three hours later saying they were granted permission. The United States consul, William Blanchard, insisted that the Victorian government arrest the Confederates as pirates, but his pleas were ignored by Victoria's governor, Sir Charles Henry Darling, who was satisfied with the Shenandoah’s pleading of neutrality when requesting to be allowed to undertake repairs. Aside from a few fist fights between Americans, there was no direct conflict between the two warring sides. However, there were eighteen desertions while ashore, and there were constant threats of Northern sympathisers joining the crew in order to capture the ship when it was at sea.
The local citizenry was very interested in the Confederate ship being in Port Phillip Bay. While at Williamstown, James Iredell Waddell, the captain of the Shenandoah and his men participated in several "official functions" the local citizens arranged in their honour, including a gala ball with the "cream of society" at Craig's Royal Hotel in Ballarat and at the Melbourne Club. Thousands of tourists came to see the ship every day, requiring special trains to accommodate them. After being treated as "little lions", the officers of the Shenandoah later reflected that the best time of their lives was given to them by the women of Melbourne.
After leaving Australia, the Shenandoah captured twenty-five additional Union whaling ships before finally surrendering at Liverpool, England in November, 1865. Those surrendering included 42 Australians who had joined the crew at Williamstown; sources differ as to whether the Australians were stowaways or illegally recruited. Waddell did refuse Australian authorities to see if Australians were aboard the ship prior to sailing from Williamstown on February 18. Four Australians were arrested to prevent them from joining the Confederate ships, and Governor Darling allowed the Shenandoah to sail away, instead of firing upon it. Waddell's official report said that on February 18 they "found on board" the 42 men, and made 36 sailors and enlisted six as marines. One of the original Confederate crewmen, midshipman John Thomson Mason, stated that they just happened to find the stowaways, of various nationalities, and enlisted them outside of Australian waters. He further said one of the stowaways was the captain of an English steamer that was at Melbourne at the time; the Englishman became the captain's clerk.
The news of the assassination of Abraham Lincoln on 15 April, 1865 caused demonstrations of sorrow in Sydney. An editorial in Melbourne's "The Age" newspaper on June 27, 1865 reported that in Sydney the assassination of Lincoln had caused great indignation. There were many Australian sympathisers that wanted to put an end to slavery, a central issue with Lincoln and his Emancipation Proclamation. A memorial service was held in Sydney's Prince of Wales Opera House on Sunday afternoon July 9, 1865. There were strong feelings of anger at public meetings against the killer of Lincoln, a person so dedicated to his country. They figured he was a genius who rose "from a log cabin to the White House."
A public meeting was held in Sydney to express sympathy for Lincoln's death and a meeting of American citizens held on June 26, 1865 had decided to forward a letter of condolence to Mrs. Lincoln, to contribute for a monumental tablet, and wear mourning for a month. There was a letter of sympathy sent to Lincoln's wife from the mayor of the city of Sydney expressing the city's condolences.
News of Lincoln's assassination was reported in the Melbourne's "The Age" on June 24, 1865. In the Melbourne newspapers, editorials were prominent. There was mention in the Melbourne Herald for June 26, 1865 that many of the American houses in town carried their national ensign at half-mast as a mark of respect to the memory of the late President. William Blanchard, the U.S. Consul in Melbourne at the time, on finding out the news of Lincoln's death, caused the consular flag to be kept at half-mast until July 4, 1865. The City Council of Melbourne passed a resolution "expressive of its horror and detestation of the atrocious murder of the late Chief Magistrate."
There were other letters of sympathy from Australia. They came from the Polish and Hungarian Refugees in Melbourne dated July 4, 1865; Citizens of the Swiss Republic Residents in New South Wales; Sydney Irish National League, NSW Branch, dated July 22, 1865; and from the mayor of Sydney Municipal Council dated July 17, 1865. Another letter of sympathy came from the town of Geelong in Victoria, addressed to "Mrs. Lincoln, Washington, America" dated August 22, 1865.
The residents of Melbourne, realising they were vulnerable to attack by others, especially the Russians due to the events during the war, hurried to build coastal defence forts. This included the government of Victoria requesting an ironclad ship to be sent to protect the colony, after the values of ironclads were demonstrated during the American Civil War's Battle of Hampton Roads. The monitor HMVS Cerberus was constructed during the late 1860s, and duly arrived in Victoria in 1871.
In 1872 the British government paid the United States $3,875,000 as a result of the assistance provided to CSS Shenandoah and other Confederate ships in Victoria and other ports controlled by Great Britain, after an international jury ruled on the case in Geneva, Switzerland.
In 1972, the American Civil War Round Table of Australia was founded. Its secretary, Barry Crompton, has the largest library dedicated to the American Civil War outside the United States, with over 4,000 pieces as of 2005.
When the six colonies of the Australian continent federated to form a self-governing nation in 1901, Australia favoured the British model of government as they had misgivings about America's powerful postwar "monarchical" presidency. Australians also opposed the importation of "coloured labour", in part due to fears of a similar civil war breaking out in Australia. A further precautionary measure was evident in the addition of the word "indissoluble" to the Federal Constitution of 1897–1898 in Adelaide, to prevent the "political heresy" of secession as engaged in by the Confederacy.