Nancy ( 1775 ) Nancy was an American brig , also called brigantine , chartered to transport war supplies during the American Revolutionary War . After learning that independence had been declared , her captain , according to his daughter , raised the first American flag in a foreign port . Evading British capture , she was later intentionally destroyed with a huge blast on June 29 , 1776 during the Battle of Turtle Gut Inlet near Cape May , New Jersey . History . Construction . " Nancy " was built by Barney Harris in Wilmington , Delaware and was owned by Joseph Shallcross , Joseph Tatnall , and others . Her captain was Hugh Montgomery , also from Wilmington . Military charter . On March 1 , 1776 , Robert Morris of the Pennsylvania chartered " Nancy " to transport gunpowder and arms for the revolution . Later in March , she sailed to Puerto Rico to purchase arms and ammunition . By early June , she had loaded additional supplies in the Caribbean islands of St . Thomas and St . Croix . First American flag in a foreign port . While at St . Thomas , Captain Montgomery received news that independence had been declared . An American flag was created by ensign Thomas Mendenhall and flown to replace the British one . This was " the first American stars ever seen in a foreign port " ; that is , according to Elizabeth Montgomery , the captain ' s daughter , and Thomas C . Mendenhall , by family tradition . Her book includes an mezzotint engraving by John Sartain that shows " Nancy " flying an American flag with a circle of ten stars surrounding three central stars . Since " Nancy " was subsequently destroyed on June 29 , this would place the flag raising before the Declaration of Independence on July 4 , but after the resolution for independence , proposed on June 7 to the Continental Congress . Turtle Gut Inlet . In the early hours of June 29 , pursued by and and blocked from entering the Delaware Bay , " Nancy " headed for the nearby Turtle Gut Inlet in a heavy fog . She soon ran aground , while the larger British ships were kept to deeper waters . Although still out of range but sailing closer , the British shelled " Nancy " , while the Americans from , , and attempted to salvage the cargo , especially the gunpowder kegs . One group returned cannon fire to keep the British from boarding . Another transferred the cargo onto longboats and rowed to shore where local residents helped unload and secure it behind the dunes . By late in the morning of June 29 , most of the gunpowder had been removed , but the British bombardment had heavily damaged the " Nancy " . The main sail was then wrapped around 50 pounds of gunpowder to create a long fuse running from the nearly 100 gunpowder kegs remaining in the hold to the deck and over the side . The fuse was lit as the crew abandoned ship , while one last sailor climbed the mast to remove the American flag . The British thought the lowering of the flag was a sign of surrender and quickly boarded " Nancy " . By then the fuse had reached the hold . The gunpowder exploded with a huge blast felt for miles . Salvage . On July 12 , 1776 , the Pennsylvania Committee of Safety recognized the £1457 claim of Joseph Shallcross & Co . for the loss of " Nancy " . Legacy . The Seal of Wildwood Crest and the Seal of the Wildwood Crest Historical Society each contain a drawing of " Nancy " in honor of the battle .