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Rivers unit people, mountains divide people. One of the problems with the US is that rivers were given to the Federal Government in the US Constitution and thus could become useful as administrative borders, but were NEVER intended to be National Borders.
People tend to forget that by 1862, except for Vicksburg, the Mississippi was completely in US Hands. Any peace treaty after 1863 would have had to recognize that fact. If a treaty was signed BEFORE the fall of Vicksburg, free navigation on the Mississippi would have had to be a requirement of the treaty, so that the Midwest, Pittsburgh to the Dakotas would have the best access to foreign and Eastern ports. Nothing less would have been acceptable to the Mid-West.
If you get over the hurtle of the Mid-west, then the actual border has to be decided on. When Virginia succeeded, West Virginia succeeded from Virginia. does it become a northern state? or does West Virginia return to Virginia? If West Virginia returns to Virginia you cut off Pittsburgh from full access to the Ohio River, in fact the best train route west from Pittsburgh to Ohio would require entrance of another country, then to exit that country. Furthermore the Northern Panhandle of West Virginia was even more pro-union then the North (And opposed the whole idea of Succession). Would Virginia want to retain it?
Now, the Southern Part of West Virginia seems to be more pro-south (Through anti-Virginia), but as you go down the Appalachian Mountains, the Mountains were notarized for being the most pro-union area of the whole south (if we do not count the Slaves in many almost all African American Counties in the Cotton Belt). Would the South accept these Areas staying in the North (Where they wanted to stay)?
The "Best" Border given the problems of how inter-related the South West of the Appalachian and the Mid-West were and are has to be an arbitrary line, some people would hate it, but if is the best that could have been done given the circumstances in the Country.
Lets State with Delaware, where it went dependent on where Maryland went. If Maryland went south, Delaware had that option, if Maryland stayed with the North, so did Delaware.
That gets us to Maryland, Baltimore and the surrounding coastal plains wanted to go with the South. On the other hand Fredrick and Western Maryland wanted to stay with the North. DC is right on the Potomac River, a River that drains Western Maryland, but also the Shenandoah Valley of Virginia. The South for that reason would demand all of Maryland, permitting some of the Western Counties to Join West Virginia. Fredrick and Hagerstown Maryland are in the Drainage area of the Potomac River, but on themselves NOT on the Potomac itself, both areas would want to stay with the North.
A side issue would be Maryland's domain of the Potomac River. Unlike every other river in the US that is a border between states, Maryland's border is the SOUTH bank of the Potomac NOT the middle of the River (i.e. The Potomac is a MARYLAND RIVER, not a Virginian-Maryland River), Virginia border with Maryland is the same south Bank of the Potomac. It is a unique situation in the US. If the Coastal areas go with the South, that rule would remain, but I see Virginia demanding land on the NORTH Bank, so that the Potomac is 100% in the South, not a border between the two nations.
West Virginia would want to stay with the North, except for its Eastern Panhandle, which was only given to West Virginia as part of the politics of the Civil War. I see the Eastern Panhandle going with Virginia. Western Kentucky was another pro-union area. Thus I see the Shenandoah Valley staying with Virginia and the South, but the present West Virginia and Virginia Border becoming the national border between the two nations.
Kentucky will also want to stay with the North, for it would want full access to the Ohio, thus the National Border would be the present Kentucky-Tennessee border. Once away from the Appalachian Mountains Kentucky became more and more pro-south, but the need for access to the Ohio will over rule all other considerations.
St Louis will be an issue, St Louis and Missouri was pro-South, but as you headed North in Missouri it became less and less pro-south. Cairo Illinois was a pro-North City SOUTH of St Louis on the Mississippi River. Thus do you want pro-union Cairo part of the South, or pro-South St Louis in the North? Access to the Missouri and Ohio Rivers would be the real issue. Is suspect the North would demand both areas to stay in the North, forcing the border to be the Northern Border of Arkansas.
Texas was pro-South, but sparely settled West of the line from Dallas-Austin-St Antonio. Mew Mexico and Arizona were pro-south, but the population was so low that if the Native Americans counted, both sides would have lost to an Independent Native American Nation (By 1860, the native Mexican population had fallen to the third place in this population contest, but it also show how few people where in the area west of Dallas and Austin Texas).
California was solidly pro-north, with the possible exception of Southern California (A backwater at that time of history, which if anything was pro-Mexico, given its large Native Mexican Population). Nevada had even less people, but Silver was found in 1859, and the North was NOT going to give that up. The big issue would be does Texas keep its Panhandles? In many ways El Paso is more important to New Mexico then to Texas and thus to hold New Mexico you need El Paso.
I skipped Oklahoma for in the 1860s that was "Indian Territory" that was to be an Native American controlled territory. The Cherokees and other tribes had been re-settled in Oklahoma from the 1830s onward. These tribes tend to support the South. The Red River separates Oklahoma from Texas and as I stated above, Rivers tend to unite people not divide them, thus I see the South Giving up West Texas for Oklahoma. Texas would probably keep its Northern Panhandle, but the western border would continue straight south when it came to the Western panhandle. An alternative situation would be the Northern Panhandle also stays with the North, and the Western Border of Texas would go straight south from where the Eastern Border of the Northern Panhandle crosses the Red River, south. This is still while west of Dallas, Austin and San Antonio. In this later scenario the Panhandle of Oklahoma would also stay with the North, while the rest of Oklahoma would join the South.
Yes, the South would be much smaller then the North, but that was the situation in 1861 anyways. The big issue would be the access to the Mississippi River and to New Orleans. The mid-west would demand free access and passage, the South would see such Northern River barges and ships as a source of revenue, conflict built right into any such division. That combined with the North abolishing slavery after the South left, thus refusing to permit South Slave owners to come north to claim their slaves, Tension would slowly build till a war of annexation would have been undertaken by the North. The South position would have been strong, till the Boll Weevil started to attack Cotton in the late 1870s, but then you would have seen a slow deterioration of the South compared to the North as what did happen after the 1880s and did not reverse till the New Deal in the 1930s (TVA was start of the transformation of the South from an cotton based economy to the more balanced southern economy of today). After WWII, the South would NOT have had the military basis the south had from WWII onward, the North would want that money to stay in the North and the South would have no way to put those bases in the South for the south would be a different Country. If the South survived as an independent Country till today, it would be a backwater, more like Mexico and Central America then the American South of Today.
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