Excerpt from my history:
The flags of the Second US Civil War
As the civil war between CIVGOV and MILGOV started both sides were still using the US flag. Neither side was willing however to cede the use of this to the other by adopting a new flag (and thus seem to infer legitimacy on them). With both sides using identical uniforms and equipment this lead to a large number of blue-on-blue incidents. The result of this was the reluctance of units to fire upon each other without a positive identification usually based upon the unit insignia (which was only visible at short distances).
Occasionally MILGOV forces would be seen with a flag based upon the US Army pattern. More often the presidential seal on a blue background would be found used by CIVGOV although this was not common.
MILGOV did issue a brassard for militia units (who were without uniform) which had the wording “MILGOV Local Forces” (although the lettering and occasionally the wording was subject to variation) – many existing examples incorporated the US flag at the top. Despite stories stating that a similar brassard was created by CIVGOV, no genuine example has yet surfaced with all the existing ones being either post-war fakes or of unknown origin.
New America issued an arm band (as they too were commonly wearing standard US Army equipment), this consisted of a single white star on a background of a red stripe above a blue stripe. Few variations of this are known to exist.
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