Lady Davis, formerly the Richmond iron, steam tug James Gray, built at Philadelphia in 1858, was purchased in March 1861 by Governor Pickens of South Carolina, who armed her and placed in command Lt. W. G. Dozier, South Carolina Navy, with orders to thwart reinforcement of Fort Sumter by Union troops.

On 7 May 1861 Lady Davis was purchased by the Confederacy for $32,000 and commissioned in the Confederate Navy, operating thereafter along the Georgia as well as the South Carolina coasts. Lt. T. P. Pelot, CSN, took command about 5 days later, relieving Lt. E. C. Stockton, South Carolina Navy. At that time, the little gunboat served as flagship of Commodore Tatt-nall's Savannah Defense Squadron, consisting of CSS (Old) Savannah, Samson and Resolute.

On 19 May Lady Davis began her career with distinction by capturing and taking into Beaufort the A. B. Thompson, a full-rigged ship of 980 tons and a crew of 23 out of Brunswick, Maine, whom she encountered off Savannah while on an expedition seeking the U.S. armed brig Perry. The exploit culminated in acrimonious litigation to decide whether an Army captain and a dozen of his soldiers should share in the prize money. Capt. Stephen Elliott, Jr., CSA, happened to be on board and acted as pilot during the capture and afterward, while his men claimed to have helped bring in the prize.

On the following day, the crew were reenlisted into the Confederate States Navy, the State officers being replaced by regulars between then and 1 June. Lady Davis's rifled gun remained the property of South Carolina, on loan, while the other, a 24-pounder howitzer, was a gift outright to the Confederacy. By November, Lt. John Rutledge commanded her.

She joined in the battle of Port Royal, S.C., 7 November 1861. Although her engines were transferred to CSS Palmetto State late in 1862, well built iron hulls were in great demand and she was able to continue her successful career as a privately owned blockade runner put of Charleston. With the occupation of Charleston in 1865 by Federal forces, Lady Davis was captured and turned over to the Light House Board by Adm. J. A. Dahlgren, who praised her hull, while noting that she was, again, minus her machinery, whose disposition is not recorded.