"...no question that there was a limit against which the United States could push at which Patton, Martin, and McReynolds would storm out of the room, even if that would threaten the war to start up again. It was for this reason that Stimson had advised against anything other than a demobilization of rotating back the most experienced and thus fatigued men to be replaced with the latest training cadres and lowering the number of recruits and conscripts being brought through the system; already, Stimson had begun working closely with an utterly spent Bliss to retool the US Army into an occupation force, as the wily Secretary of War strongly doubted that the Confederacy would "act honorably, as they have never before" in terms of accepting the terms of a treaty.
The Confederate Army was allowed a standing army of twenty-five thousand men, or two divisions, with a division held in reserve; it was forbidden from deploying horse or armored cavalry, and was allowed ten airplanes and sixteen scouting balloons that were to remain unarmed at all time. The state militias were to be capped at five thousand men apiece, with similar equipment restrictions, and the Confederate government would agree in the clauses of the final treaty to ban the deployment of said militias outside of their home states. The Confederate Navy was permitted an equivalent tonnage of two cruisers, total, in essence forcing them to deploy a patrol fleet of cutters along their coastlines rather than anything substantive, and Confederate naval vessels were not allowed to pass north of a line from the mouth of the York River to Cape Charles, thus keeping the Chesapeake in essence an American lake with a shared mouth. The Confederacy was also to ban conscription and make their military services entirely professional and all-volunteer, a novel clause, but one meant to avoid mass mobilization in the future.
This arguably solved the least thorny issue of the peace, guaranteeing that the Confederacy could pose no threat militarily in the future and reducing the danger of a threat to an expected American occupation, which was the next piece pursued by Root, Lodge and Turner. The Confederacy was to allow the military occupation of "ports, railyards and areas of strategic value" to "ensure the execution of the terms of any final agreement;" this meant that cities that had never fallen into American hands, such as New Orleans, were to be opened and Yankee soldiers allowed in to occupy. The operation of the Confederate rail system was handed over in its entirety to the United States Army, and civilian officialdom in the Confederacy was to "cooperate and obey military directives in such cases as civil authority and the United States Army would otherwise conflict;" while the whole of the country was not being divided up into military districts, it may as well have been, and the continuation of constitutional rule of law in much of the Confederacy was window dressing (and, as it was quickly seen, difficult to enforce in fact)..."
- Making Sense of the Senseless: The Great American War at 100
"...Turner proved unhappy with due to the dependence of his party on states with strong resource extraction economies in the Mine Belt, but the economic provisions of the final treaty were non-negotiable to Lodge especially, and Chelwood provided important aid in finding a compromise position between the two Senators that both could live with. The Confederacy was not to set any tariffs upon the United States, either generally or specific to any good or industry, for a period of fifty years, after which they would be permitted to levy a tariff of five percent on raw goods for the next twenty and a tariff of ten percent on raw goods in perpetuity thereafter, but "finished and industrial goods" were to remain forever exempt. The Confederacy was also not to set any export duties - a popular method of financing its government - on raw goods to the United States under the same terms. Root was highly skeptical of the sunset clause, finding them uncomfortably similar to the Treaty of Havana's sunsets that had sparked the entire conflict in the first place, but was swayed by Turner that the circumstances were entirely different.
And regarding the Mississippi, indeed they were. The Confederacy was to make "the whole of the river and its drainage (emphasis ours) available for the commercial use of the United States irrevocably and without physical interdiction, molestation by way of tariff, or interruption of the free flow of trade in any riverine port." Regarding New Orleans, the Confederacy "was to levy no duty on passage out of the city or import into this Continent" on "any vessel registered and flagged as part of the United States," and the United States was also to be granted a foreign concession within New Orleans modeled upon the concessions in Asia, with an "area of 45 hectares to be reserved for the use of the United States customs authority, for banks of the United States, and citizens thereof." The plain language of these provisions meant that the United States would be able to, for the first time, collect tariffs on imports at the point of New Orleans and thereafter treat the whole Mississippi Basin as a zone of free trade on which no additional costs could be levied, dramatically reducing the risk of a trade war such as what triggered the crises of 1913.
Finally, in terms of penalties for the Confederacy, the financial indemnity was more or less ruinous. McReynolds chafed badly at the "war guilt clause" and spent much of the Congress doing whatever he could to avoid it carrying teeth, which both failed as Lodge simply delayed drafting the clauses for it and it created a bevy of concessions by Patton to evade its inclusion, and these were economic. The Confederacy was to pay a total indemnity of 15 million dollars in gold, silver or other "hard assets" per annum by 1927, and was also to pay a five hundred thousand dollar indemnity annually by a method of its choosing for the next twenty-five years, at a rate of ten percent interest. American occupation of Confederate ports was to continue until 1927 when the "grand indemnity" was paid, and the United States would reserve the right to re-occupy Confederate ports anytime thereafter should the "little indemnity" be defaulted upon. These provisions would serve to effectively cripple the Confederacy economically for over a generation, as it was already deeply indebted with much of its potential collateral destroyed; even Chelwood thought this maneuver was excessive, but Root insisted, in part to help pay down some of Philadelphia's own postwar debt.
As such, the draft treaty's first twelve chapters covered the military limits, armament restrictions, and economic guarantees by the Confederacy, all of which were remarkably harsh but which Patton and his coterie begrudgingly swallowed even as they started looking for ways to work around them almost as soon as they left Mount Vernon. The difficult measures, the ones sure to stir ill will and threaten to blow up the treaty, were yet to come on extremely emotive matters - Confederate territory, and the fate of the Negro..."
- The Root of the Problem: The Tumultuous Term of America's 29th President