Though obviously deeply concerned about the fleets apparently now blockading New York and Boston, the US Congress did not cease functioning. For over a year, the Western Counties of Virginia and Eastern Counties of Tennessee had agitated for independence as separate states. With virtually all of Tennessee under control, this latter seemed a pointless exercise but, by 1862, no one in Congress was inclined NOT to put the screws to a southern state.
Thus, the states of Kanawha (West Virginia) and Nickajack (Eastern Tennessee) were welcomed to the Union.
Having identified the error in his previous strategy, a greater portion of the Union Army was shifted west under the far more aggressive General Sheridan. Hooker had complete faith in the man and ordered Sheridan's 40,000 to march west, cross the James as soon as possible and then sweep around east to cut off the rail junctions out of Richmond and Petersburg.
His own resources strained to the breaking point, Beauregard could only dispatch 25,000 of his own 65,000 troops under General Longstreet to challenge Sheridan. Even this left Richmond and Petersburg's expansive lines dangerously exposed. Effectively, the trenches between the two cities (even after withdrawing as deeply as he dared) spanned nearly 40 miles. There were just too much territory to defend. Hooker waited until his spies, scouts and Balloon Corp verified that Longstreet had departed to challenge Sheridan and struck at perceived weakspots in the Confederate trenches.
Sappers had already been digging under several lengths of trench and set bombs, blasting huge holes in the Petersburg lines. Massive artillery bombardments pummeled key entrance points near Richmond. Hooker ordered a focused 40,000 men forward to the most promising targets.
Having defended in depth, the Confederates were ready. Even when pushed back, the rebels had another set of lines on which to fall back. But they could not be everywhere at once. A full breakthrough into the city seemed imminent.
The Richmond and Danville RR snaked westwards from Richmond. This was the first target of General Sheridan. His cavalry easily cut the line in a half dozen places. This left only the southern running Norfolk and Petersburg line that ran from Richmond to the key rail junction of Petersburg and then split into several southwestern, southern and southeastern lines. Petersburg was arguably the most important rail junction in the south and its loss would be felt almost as dearly as Richmond.
Longstreet barely caught Sheridan before he could reach the outskirts of Petersburg. There were no major trenches in this direction and a pitched battle of maneuver was the only option. Hoping to lure Sheridan into attacking him on high ground, Longstreet was disappointed to find Sheridan was disinclined to oblige. Showing a shocking lack of concern about exposing his army's supply/communication lines, Longstreet belatedly realized that Sheridan was prepared to "live off the land" and didn't mind being cut off.
Instead of attacking Petersburg or Longstreet's force, Sheridan merely marched further and further south until he reached the point that the rail lines south of Petersburg were undefended by large groups of men.
Sheridan cut the Southside RR (SW), the Weldon (S) and finally Petersburg RR (SE), casually severing Petersburg and Richmond from the rest of the south. Longstreet followed aggressively but Sheridan almost....ignored him. Longstreet realized that Sheridan had no intention of facing him on anything but the Union man's terms. If Longstreet DIDN'T attack Sheridan, then the Union forces could simply keep wheeling southeast along the Confederate coast or turn north and rejoin the main Union Army besieging Petersburg and Richmond.
Finally, Longstreet caught up and his skirmishers managed to grab the tail of Sheridan's army. Picking a nice spot of high ground, the Union General awaited Longstreet's pleasure. Attacking uphill against a larger army was seldom a good idea but Longstreet had no choice. Neither army had carried heavy guns with them and the bloody affair would be mainly an infantry and light artillery engagement. The results could be expected. The forward charge was beaten back with heavy casualties. But Longstreet's greater hope was that Wade Hampton's Cavalry would be able to strike at Sheridan's supply train.
Sheridan fully expected this and left his own cavalry to defend the vital supplies. It was here that Hampton discovered that 10 of the cavalry troops had been armed with the new Spencer repeating rifle (carbine version). It was plainly superior to the Confederate counterpart and the already outnumbered Confederates were brushed off. Hampton was shot out of his saddle and bled out in the Virginia clay.
Longstreet had hoped to run Sheridan's supplies dry. Instead, Longstreet's limited supplies ran out first and he was forced to retreat west. To his shock, Sheridan did not turn north to rejoin the main Union Army and tighten the grip around Richmond. Instead, he marched south further into the Tidewater of Virginia.
The crowning achievement of Grant's Western Campaign would be the capture of Vicksburg. Having driven Bragg and his key subordinates William Sherman and Thomas Jackson south from Corinth, the Confederate Army of the Cumberland was outnumbered 2 to 1 by an aggressive Union commander.
Bragg fall back to central Mississippi. After a desultory attempt to protect the Capital of Jackson (which was not defensible), Bragg retreated southeast. However, he made sure to place Sherman and Jackson in command of the 20,000 men left to defend Vicksburg.
On the surface, this seemed an odd choice. Why put your two most active and energetic Generals in a position to basically resist a siege. The primary reason was Bragg's jealousy and fear that one of these men would replace him. Thus, he ordered them into what he knew was a trap, a vice-like Union siege. The remainder of his 45,000 man army remained with Bragg in eastern Mississippi.
Deeming Bragg not much of a threat and consolidating full control over the Mississippi River by seizing Vicksburg, Grant threw most of his resources at throttling the city.