From the conclusion of the Civil War, to the purchase of Alaska, to the increased importance of the Pacific states, the projected trade with countries in Asia and the desire for a duty-free market for Hawaiian staples, Hawaiian trade expanded. In 1865, the North Pacific Squadron was formed to embrace the western coast and Hawaii. Lackawanna in the following year was assigned to cruise among the islands, "a locality of great and increasing interest and importance. " This vessel surveyed the Northwestern Hawaiian Islands toward Japan. As a result, the United States claimed Midway Island. The Secretary of the Navy was able to write in his annual report of 1868, that in November 1867, 42 American flags flew over whaleships and merchant vessels in Honolulu to only six of other nations. This increased activity caused the permanent assignment of at least one warship to Hawaiian waters. It also praised Midway Island as possessing a harbor surpassing Honolulu's. In the following year, Congress approved an appropriation of $50,000 on March 1, 1869, to deepen the approaches to this harbor.
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