[2] On 1 January 1863, in what would come to be known as the Battle of Galveston, the improvised cotton-clad Bayou City, captained by Henry S. Lubbock the brother of Texas governor Francis Lubbock,[3] served as the flagship of a small fleet under the command of Major Leon Smith which also consisted of the tugboat Neptune and two smaller tenders, who succeeded in an operation to drive superior Union warships out of Galveston Bay.
[2] After a brief contest at sea, the USS Harriet Lane sank the Neptune, and one-half of the two-vessel Confederate fleet was lying on the bottom of the harbor.
[4] As the lone surviving Rebel steamer, the Bayou City was outnumbered six-to-one among the armed vessels in the harbor.
[4] Ultimately, the attack was a success, with the Harriet Lane captured and another Union vessel, the USS Westfield destroyed.
[2][6] Following the Battle of Galveston, Bayou City served the Confederacy in Texas waters until the conclusion of the American Civil War.