Rails - May 2006 - `connect'': undefined method `verify_mode'' for nil:NilClass

Am using Ruby 1.8.4. I am getting this error:

/usr/lib/ruby/1.8/net/http.rb:565:in `connect'': undefined method 
`verify_mode'' for nil:NilClass (NoMethodError)
        from /usr/lib/ruby/1.8/net/http.rb:555:in `do_start''
        from /usr/lib/ruby/1.8/net/http.rb:544:in `start''
        from /usr/lib/ruby/1.8/net/http.rb:1031:in `request''
        from /usr/lib/ruby/1.8/net/http.rb:840:in `post''
        from 
/usr/lib/ruby/gems/1.8/gems/payment-1.0.1/lib/payment/base.rb:52:in 
`get_response''
        from 
/usr/lib/ruby/gems/1.8/gems/payment-1.0.1/lib/payment/authorize_net.rb:45:in 
`submit''
        from test.rb:14

This is the test script I am trying to run:

test.rb:
--------

require ''rubygems''
require ''payment/authorize_net''

transaction = Payment::AuthorizeNet.new(
  :login           => ''username'',
  :password	   => ''password'',
  :amount          => ''1'',
  :card_number     => ''4007000000027'',
  :expiration      => ''0310'',
  :first_name      => ''John'',
  :last_name       => ''Doe''
)
begin
  transaction.submit
  puts "Card processed successfully: #{transaction.authorization}"
rescue Payment::PaymentError
  puts "Card was rejected: #{transaction.error_message}"
end

Any ideas as to what might be wrong?

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