In the Midwest, the Civil War caused unrest, especially among Democrats, both because some settlers sympathized with the Confederacy because they came from the South, and because it disrupted trade between the regions. Democrats in the Midwest, who historically opposed centralized banking, were further alienated by the establishment of a national paper currency with the National Banking Act. Due to these factors, Democrats in Indiana and Illinois called for a peace conference and attempted to pass legislation usurping control of the state militias from the state governors. These efforts failed, and Governor Oliver P. Morton of Illinois crushed such efforts by suspending the legislature indefinitely and relying on sources of revenue not approved by the legislature, which was “quite extralegal, if not illegal” (595).

The Ohio politician Clement L. Vallandigham, who led the Peace Democrats, was placed under “military arrest” for “disloyalty” (596). Specifically, in a speech given in Mount Vernon, Ohio on May 1st, 1863, Vallandigham violated an order given by General Burnside against any expression of treasonous sentiments. It created a politically awkward situation for Lincoln, who had Vallandigham freed from prison but exiled to the Confederacy. He then took a ship to Canada, where he ran a campaign for governor of Ohio from his exile on a peace platform.