In an effort to placate the slave-holding border states, Lincoln resisted the demands of radical Republicans for complete abolition. Yet some Union generals, such as General B. F. Butler, declared slaves escaping to their lines "contraband of war," not to be returned to their masters. Other generals decreed that the slaves of men rebelling against the Union were to be considered free. Congress, too, had been moving toward abolition. In 1861, Congress had passed an act stating that all slaves employed against the Union were to be considered free. In 1862, another act stated that all slaves of men who supported the Confederacy were to be considered free. Lincoln, aware of the public's growing support of abolition, issued the Emancipation Proclamation on January 1, 1863, declaring that all slaves in areas still in rebellion were, in the eyes of the federal government, free.
Because of recruiting difficulties, an act was passed making all men between the ages of 20 and 45 liable to be called for military service. Service could be avoided by paying a fee or finding a substitute. The act was seen as unfair to the poor, and riots in working-class sections of New York City broke out in protest. A similar conscription act in the South provoked a similar reaction.
On April 27, Union General Hooker crossed the Rappahannock River to attack General Lee's forces. Lee split his army, attacking a surprised Union army in three places and almost completely defeating them. Hooker withdrew across the Rappahannock River, giving the South a victory, but it was the Confederates' most costly victory in terms of casualties.
Union General Grant won several victories around Vicksburg, Mississippi, the fortified city considered essential to the Union's plans to regain control of the Mississippi River. On May 22, Grant began a siege of the city. After six weeks, Confederate General John Pemberton surrendered, giving up the city and 30,000 men. The capture of Port Hudson, Louisiana, shortly thereafter placed the entire Mississippi River in Union hands. The Confederacy was split in two.
Confederate General Lee decided to take the war to the enemy. On June 13, he defeated Union forces at Winchester, Virginia, and continued north to Pennsylvania. General Hooker, who had been planning to attack Richmond, was instead forced to follow Lee. Hooker, never comfortable with his commander, General Halleck, resigned on June 28, and General George Meade replaced him as commander of the Army of the Potomac.
On July 1, a chance encounter between Union and Confederate forces began the Battle of Gettysburg. In the fighting that followed, Meade had greater numbers and better defensive positions. He won the battle, but failed to follow Lee as he retreated back to Virginia. Militarily, the Battle of Gettysburg was the high-water mark of the Confederacy; it is also significant because it ended Confederate hopes of formal recognition by foreign governments. On November 19, President Lincoln dedicated a portion of the Gettysburg battlefield as a national cemetery, and delivered his memorable "Gettysburg Address."