President Abraham Lincoln approved a policy on Saturday, Jan. 23, whereby plantation owners in the South would recognize the freedom of their former slaves and hire them by fair contracts to re-commence the cultivation of their plantations. He urged the military authorities to support such a free-labor system.
The U.S. Treasury Department annulled most trade restrictions in Kentucky and Missouri. While the principal military combat areas were quiet this third week of January, there were skirmishes and engagements between opposing forces in Tennessee, Alabama, Missouri, Arkansas, in the Indian Territory, in Mississippi, in West Virginia and near Woodstock.
On Jan. 25, in an effort to consolidate their occupation points, Union troops evacuated the important rail center at Corinth, Miss. Fighting continued in the various areas of Mississippi, Arkansas, Alabama and Tennessee. Intermittent firing on Fort Sumter took place in Charleston Harbor, S.C.
The Charleston Courier reported, “The whizzing of shells has now become a matter of so little interest as to excite scarcely any attentions from passers-by.” Near the Confederate capital in Richmond, a serious fire destroyed several hospital buildings at Camp Winder. In Mississippi, at the important railroad center at Meridian, Maj. Gen. Nathan Forrest and his Confederate cavalry attacked and defeated Union troops commanded by Maj. Gen. William Sooy Smith.
On Jan. 26, President Lincoln officially approved new trade regulations for dealing with former Confederate territory, and for the so-called trading with the enemy. He also suspended the execution of soldiers in nine cases.
In Alabama, about 600 Confederate cavalry attacked the town of Athens, held by some 100 Union troops, around 4 a.m. After a two-hour battle, the Confederates retreated. Although greatly outnumbered and without any fortifications, the Federal troops repelled the Southern horsemen.
The following day, near Fair Garden, Tenn., on the French Broad River, Maj. Gen. Samuel Sturgis and his Federal troops engaged Confederate cavalry, artillery and infantry commanded by Lt. Gen. James Longstreet. The fighting was severe and substantial casualties were sustained by both sides. In the end, Gen. Sturgis withdrew his troops; due to the lack of supplies and fatigue from continual fighting, they were unable to hold their ground.
President Lincoln wired Maj. Gen. Frederick Steele in Arkansas that Gen. Steele and the civilian authorities there could manage the details of the new Arkansas government so long as the free state constitutional provisions were retained.
On Friday, Jan. 29, Confederates attacked the river steamer Sir William Wallace on the Mississippi River in another example of the continuous harassment of Union shipping. The bombardment of Fort Sumter intensified, with 583 rounds fired by Union guns. There, Confederates added a newly built ironclad, Charleston, to their defenses.
On Jan. 30, Maj. Gen. William Rosecrans superseded Maj. Gen. John Schofield in command of the Federal Department of the Missouri, and Maj. Gen. Steele assumed full command of the Department of Arkansas. In Culpeper County, a Union cavalry scout operated between Culpeper and Madison Courthouse in Madison County.
On the final day of January, President Lincoln, implying that he would loosen the requirements stated in his Proclamation of Amnesty & Reconstruction, wired Maj. Gen. Nathaniel Banks in New Orleans that he was “at liberty to adopt any rule which shall admit to vote any unquestionably loyal free state men and none others. And yet I do wish they would all take the oath.”
There was more fighting on Jan. 31 near Madison Courthouse and from south of the James River beyond Richmond. Despite a seeming stalemate on all fronts, a rather nasty war had developed, with the increase in the number of small patrols, guerilla activities, partisan warfare, desperate forays deep into enemy territory and sniping at river vessels. On the Southern coastline, the U.S. Navy was squeezing the many attempts to run the blockade.