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The year is 1861. The POD occurs two years ago, when the 1858 Congressional Elections returned an all-Democrat congressional delegation for New Jersey. The second POD occurs when Lincoln surrogate David Davis decides not to make a deal with Pennsylvania governor Simon Cameron. Instead, William Seward makes the same deal and wins the nomination. Cassius Clay is selected as Seward's running mate.
The more radical Seward makes several well-publicized gaffes which make him seem more radical than he actually is. Things get worse when, in retaliation for the Dredd-Scott decision, an antislavery radical pulls a gun and assassinates Chief Justice Roger B Taney.
Between the Taney Assassination and Seward's surprisingly poorly-run campaign, the 1860 Presidential goes as follows:
Seward: 123 Breckenridge: 67 Douglas: 66 Bell: 47
As such, the election goes to the House of Representatives. On the first ballot of the 1860 Contingent Election, this is the result:
Seward: 14 Breckenridge 14 Douglas: 5
Seward and Breckenridge both insist that Douglas drop out- he in turn presents himself as the only man who can prevent calamity. The standoff continues for weeks on end, with the Senate similarly deadlocked. A number of Southerners vote for Douglas' running mate, Herschel Johnson, thinking him a fine compromise candidate. However, they are unable to gain the majority needed to advance their idea, and the position of Vice President remains vacant.
March 4th, 1861 comes and goes, and with no President and no new Vice President, the incumbent VP and, coincidentally, Southern Democratic candidate in the first place, John Breckenridge, takes office as President. In his brief remarks before taking the oath of office, he calls "for calm, for reason, and for measured discussion," in the coming months, as he is technically only the interim President.
The Republicans, however, are energized, and now, with their new majority in the House of Representatives, they attempt to continue debate over who the President should be.
Therein lay a constitutional conundrum: can they even do that? The 12th amendment states that if Inauguration Day passes without a candidate then the sitting Vice President will act as president, as in the case of the death of a President or other inability to hold office. The Tyler Precedent would state that this means the VP is President until March 4th, 1865. This, naturally, was most unsatisfactory to the Republicans.
The Republicans, with their majority in Congress, elect William Seward on March 12, 1861. They then petition President Breckenridge for his resignation. Breckenridge refuses. On April 19th, in Breckenridge vs Seward, the Supreme Court rules in favor of Breckenridge,
A few days later, they return another ruling: in Lemmon vs New York, they rule in favor of Lemmon, overturning all state laws against out-of-state residents bringing in slaves. The North is enraged.
On May 19th, 1861, William Seward travels to New York City, where he stages an inauguration of his own in front of City Hall, sworn in by Supreme Court Justice Benjamin Robbins Curtis. Seward assembles his own cabinet and asks that Congress join him in New York. A number of Republicans and some Northen Democrats do so. Seward declares a state of insurrection and calls for a general mobilization against the South*.
The situation now, on July 4th, 1861, is as it stands: the states of Rhode Island, Massachusetts, Connecticut, Maine, New Hampshire, Vermont, Michigan, Indiana, Illinois, Minnesota, Wisconsin, New York, and Iowa have declared for Seward. Pennsylvania and New Jersey are officially neutral, courtesy of two Democratic governors (the selection of machine politician Simon Cameron as gubernatorial candidate turned off about 4% of PA voters, electing a Democrat). Seward was soon driven out of New York City, which aims to remain neutral and may even declare for Breckenridge, and has instead set up a capital in Boston.
Strong loyalist sympathies remain throughout southern Illinois and Indiana, in addition to parts of Pennsylvania and New York. Pro-Seward Pennsylvanians have set up their own state capital in Williamsport. Philadelphia could jump either way. About two-thirds the Navy has defected.
You are John Breckenridge: how do you proceed?
*Edit: When I say this, I mean that Seward is declaring that all the states not siding with him are in open rebellion against the United States. He's calling Breckenridge an illegitimate President and a tyrant, in the traditional sense of a tyrant being one who seizes power illegally.