Rumors circulate and prices of the cargo of the "Southern Cross" fluctuate wildly, leaving Steve to suspect a wreck is planned. He commandeers the "Claiborne" with Loxi on board and heads to Havana to stop Jack. Loxi, believing Jack is innocent, disables her ship, and they sit becalmed in a fog bank as the "Southern Cross" piles into a reef and sinks. Unknown to Jack, Drusilla had stowed away to be with her lover, King Cutler's brother Dan (Preston), and she drowned.