US navy archives indicate that she was returned to the United States in 1868 or thereabout and worked as a civilian steamship until she sank in on January 10, 1874 near Wilmington, North Carolina.
The following article is from Early American Steamers Vol. I by Eric Heyl.
Ostensibly the PRINCESS ROYAL was built for the Glasgow & Liverpool Steam Packet Co., in 1861. her general appearance was much more that of a blockade-runner than an Irish Channel steamer, and it is wore than probable that she was built for blockade running purposes. The profits were so fantastically large that one or two successful trips more than repaid the speculators all their costs and expenses. The PRINCESS ROYAL was sold to Liverpool owner; who immediately began running the Federal blockade with her.
On January 29, 1863 she tried to slip thru the Federal fleet off Charleston, S.C. She came from London via Newfoundland, Nova Scotia and Bermuda with a very valuable cargo of marine engines for some rams that were being built at Charleston, rifled Whitworth guns, armor plates, small arms, shoes, hospital provisions and other contraband all consigned to the Confederate States and nearly worth their weight in gold.
The USS UNADILLA headed off the Princess Royal and forced her ashore where she was seized by a prize crew of her captor. Though the Confederates made the most desperate efforts either to recapture the blockade-runner and her precious cargo, or failing that to destroy her, they did not succeed and she was finally floated off by the successful Federals and anchored alongside the USS HOUSATONIC. Later she was taken north and condemned in prize court at Philadelphia, bringing $342,000 - for distribution to the officers and crew of the USS UNADILLA.
Bought March 18, 1863 by the U.S. Navy Department for $112,000, she was given a battery of two 30-pound Parrott rifles, one 11-inch Dahlgren gun and four 24-pound howitzers, being commissioned USS PRINCESS ROYAL shortly afterwards.
On June 28, 1863 she had a sharp engagement with some Confederate forces at Donaldsonville, LA., in which USS KINEO and USS WINONA also participated, driving the enemy forces off the field. On August 10, 1863 USS PRINCESS ROYAL captured the small schooner ATLANTIC loaded with cotton off Rio Orande, Tex. She continued on active blockading duty all during the rest of 1863 and 1864 capturing several small brigs and schooners. On December 7, 1864, assisted by USS CHOCURA, she captured the schooner ALABAMA from Havana and on February 7, 1865, USS PRINCESS ROYAL and USS BIENVILLE nabbed several small schooners off Galveston, Tex.
In the summer of 1865 USS PRINCESS ROYAL was brought to Philadelphia and decommissioned, being sold at auction on August 17, 1885 to Samuel C. Cook for $54,175.
Nothing is known about her until early in 1868 when Cook sold the PRINCESS ROYAL to William F. Weld Co. of Boston, who were building up their Merchants of Boston SS Co. She was reconditioned and altered to fit her for this work, being also renamed GENERAL SHERMAN. She was put into the New Orleans service with four other purchased steamers.
On January 4, 1874, the GENERAL SHERMAN left New York on her usual run with four passengers and a crew of forty-two men. Her cargo consisted of general merchandise consigned to New Orleans. The weather began to worsen and on January 7, 1874 at 2:00 AM the GENERAL SHERMAN sprung a bad leak, so that her pumps could not take care of the water pouring into her. The steamer was headed for the nearest shore.
In the morning of January 8, 1874, the rising water had put out the fires, and as the wind had now shifted and was blowing her back to sea. She anchored and sent a boat to Little River, about twelve miles off.
The schooner SPRAY followed by the schooner FLORENCE went to the assistance of the GENERAL SHERMAN, taking off six men, some baggage and a few lots of the cargo; the FLORENCE removed the rest of the people on the GENERAL SHERMAN, also the passengers: one woman, two children and a man, as well as most of the baggage.
The SPRAY left about 4:00 PM, the FLORENCE staying behind until everything possible had been salvaged. Both of the schooners sailed to Wilmington, N.C. from where the steam tug BRANDT was despatched about noon, January 10, 1874. She managed to put a hawser to the PRINCESS ROYAL and towed her as far as Tub's Inlet, twenty-seven miles from Cape Fear, when she sank. The picture of her is as a U.S. gun-boat.