According to a February 2, 1897, House Report, the shipbuilders put forth a claim against the U.S. Government that despite the total contract price of $164,000 for both the Agawam and the USS Pontoosuc, they had spent $223,826.16 in building the two ships.

[2] On 9 December 1863, some three months before Agawam was placed in full commission, Southern agents and sympathizers had boarded the steam packet Chesapeake at New York City under the guise of being passengers bound for Portland, Maine.

Shortly after midnight on the 7th, when the liner had reached a point some 20 mi (32 km) north of the tip of Cape Cod, these men revealed their formerly concealed side arms and took over the ship, killing her second engineer.

From there, they took the ship to Canadian waters in the hope that their daring act would provoke Union warships into violating British neutrality and thereby embroil the United States in a war with England.

When word of Chesapeake's capture reached Portland, the deputy collector of customs at that port wired Rear Admiral Francis Gregory, the supervisor of construction of all Union warships then being built in private shipyards, informing him of the loss and requesting permission to arm, man, and send out in pursuit the unfinished but seaworthy Agawam.

It was locally reported, however, that due to the cold weather and severe wind, the Agawam in pursuit of the Chesapeake burned more coal than expected and was required to stop at Rockland to resupply.

Having made several unsuccessful attempts in the stormy weather to get back out to sea, she changed course and began cruising northward along the coast until impenetrable fog forced her to anchor.

Agawam reached Hampton Roads, Virginia on 9 May and two days later stood up the James River to join other Union ships in protecting Benjamin Butler's transports and supply ships which were threatened by torpedoes (naval mines), shore batteries, and a possible attack by Confederate ironclads which were lying in the river above the Confederate batteries of Fort Darling at Drewry's Bluff.

The danger lurking in the muddy waters of the James River had recently been emphasized by the sinking of USS Commodore Jones on the 6th while that side-wheel ferryboat was dragging for Southern torpedoes, or, in 20th century parlance, floating and submerged mines.

intrenching the heights at Hewlett's house, commanding Trent's Reach,a straight stretch of the river flowing east along the northeastern section of Bermuda Hundred.

From first planning to land a force at Bermuda Hundred, General Butler had been fearful that Confederate warships might descend from Richmond and sink his transports and supply ships.

.Confident in the ability of his warships, Admiral Lee was eager to meet the Southern squadron and was hopeful that his flotilla might ascend the James past the batteries at Drewry's Bluff and capture Richmond.

However, early in June, Ulysses S. Grant decided to shift the Army of the Potomac from its lines at Cold Harbor across the James to join Butler in operations against Richmond from the south.

The first stone-laden schooner was sunk on 15 June, and the operation continued until Union Army leaders felt safe from Southern ironclads.

She entered Pamlico Sound, North Carolina, two days later and operated in the island waters of that state through the end of the Civil War.