James has spotted Elizabeth, but how to stop her? At daylight, James flies a bogus distress flag (against every rule of the sea). The cargo is guns, secreted beneath a layer of mining equipment. James offers to find a customer for the guns at £1 a piece. Elizabeth is unsure what to do and asks for £2. James agrees thinking that he can get £6 selling them to the government at the Cape. The Major refuses threatening to alert the authorities if James does not hand them over. James is £1000 out of pocket and Lady Elizabeth is home free. Baines chuckles to himself as James writhes at the loss.