There are scenarios where a move somewhat like this would be possible, but you face (at least) three major problems: -- First one is the fact that negotiations must occur in good faith. Party of that is that they are based on the status quo ante and work towards finding a new status quo. Attempting to impose your will on the other party might be tried, but trying to make your will part of the preconditions is most definitely bad faith. Essentially, Lincoln can't issue that proclamation and negotiate. -- Second one is more general, and more crucial: he literally can't do it if he's negotiating, because it was done on the basis of war powers. If still negotiating, he just doesn't have that authority, and there is no way Congress backs that kind of move that early on. There was a lot of criticism even in OTL, and that was late in the war, in a scenario where the Upper South had seceded. -- Third one ties into the second: if negotiations are the way Lincoln goes, the secession wave of the Upper South is prevented. He's got a considerable segment of slave states in the Union. He can't make it about slavery without causing trouble he definitely doesn't want. ---- Of course, having Britain magically by your side would be great. But it's not happening. At best, very best, Britain eventually decides it's in its interests to trade with the CSA, recognises it, and tells the USA to stop being a bother. (A policy that will then be backed up by naval power if the USA tries to hinder British ships.) I don't see that happening until and unless the South can do so well that Lincoln gets defeated in '64. ---- Let me be clear: I think a hypothetical war to invade the CSA and forcibly end slavery would be just fine and dandy. And for the exact same reason I support secession in basically all cases: because self-determination is sacred to me. Anyway, that's still not the point here. The bit about the Fugitive Slave Act could potentially be used to reveal Southern hypocrisy, although that would depend on whether they'd actually be stupid enough to claim extradition based on the Act. I'm not entirely sure, but I don't think they ever did so in OTL. If they did, they were considerably more idiotic than I thought. Agreed that you can probably get some capital flight to take place-- though note that most Southern capital is tied into its plantation economy. That's not going anywhere. I also agree that Lincoln is never going to agree to recognise the CSA just to get them to pay up any outstanding private debts etc. -- they goal would be to make it in the interest of other parties (banks, lenders, investers, businessmen, members of the public who are owed money from Southern sources) to just recognise the CSA and in so doing get their money back.