On July 7, 1776, Major General Philip Schuyler, commander of the Northern Department, convened a council of war at Crown Point, New York, to assess the military situation following the American retreat from Canada. In attendance were Major General Horatio Gates, newly appointed commander of the nonexistent American army in Canada, Major General John Sullivan, and a recently promoted brigadier general, Benedict Arnold. The situation looked grim. The council decided to abandon the tenuous position at Crown Point and withdraw American forces to a more defensible position at Fort Ticonderoga. This decision, however, left only a modest flotilla of small wooden ships on Lake Champlain, under the command of Commodore Jacobus Wynkoop of New York, as the last line of defense between the approaching British and Ticonderoga. Therefore, it was decided to augment the fleet by constructing more vessels in an attempt to thwart the expected British invasion. The small American fleet constructed on Lake Champlain would eventually meet the British in the Battle of Valcour Island, a battle that, in all likelihood, saved the American cause.
Arnold, who had proven his military skills during the American expedition into Canada, was given the assignment of overseeing construction of the American fleet being built at Skenesborough, New York. Although serving in the Continental Army, Arnold had significant experience in ships and shipbuilding. Before the war, he had made his living shipping goods to the Caribbean from New England and had amassed considerable wealth as a result. Arnold’s arrival at Skenesborough gave the American shipbuilding effort the leadership and experience it needed to make it an effective fighting force. Under the leadership of Wynkoop, the strength of the American fleet had actually deteriorated. As a result, Arnold assumed overall command of the fleet on August 7, 1776.