On Friday, August 2, 1861, the Battle of Dug Springs took place in Missouri. Events were rapidly coming to a head in the state.
Union General Nathaniel Lyon had declared war on Governor Claiborne Jackson and Sterling Price, the commander of the state militia. He drove them away from Jefferson City, the state capital, routed the militia at Boonville, and pursued them to the southwest corner of the state.
Now Lyon was in a precarious situation. He was in Springfield, far from his home base of St. Louis, and outnumbered. Price's militia had joined with Confederate troops from Arkansas under General Ben McCulloch, giving them about a 2-to-1 advantage over Lyon. Also, many of Lyon's men were leaving or preparing to leave as their 90-day enlistments ran out.
On August 1, Lyon got the news that the large Southern force was advancing on his position. There were said to be three columns of troops with the main column advancing up the Wire road (named for the telegraph wires that lined it).
Lyon would have been wise to retreat, but did not want to do so without a fight. He put his forces on the road to meet this threat. They camped 12 miles south of Springfield that night, and continued the march the next morning. Lyon planned to attack the main column, and if all went well, take on the other columns in turn.
Advance units from the opposing forces ran into each other at 9 a.m. on August 2 on the Wire road. The Battle of Dug Springs lasted for about five hours, ebbing back and forth as both sides cautiously launched probing attacks to determine the size of the force they faced. Although he was outnumbered by the combined Southern forces, Lyon had the advantage with the troops that were present for this fight. His vanguard, composed of U.S. Army regulars, faced six companies of Missouri State Guard troops under General James Rains.
Eventually, a charge by troops from the 2nd U.S. Infantry scattered Rains's men, and they retreated back down the Wire road. The Southerners would call the battle "Rains' Scare," and it would reinforce McCulloch's low opinion of the fighting abilities of the Missouri troops, but they would regroup and continue the advance. Lyon would plan one more attack. The armies would meet on August 10 at Wilson's Creek.
Also on this date, Colonel William Tecumseh Sherman was promoted to brigadier general, dated from May 17. He was transferred to Kentucky where he was second in command under General Robert Anderson, the hero of Fort Sumter.
And, the U.S. Congress voted to impose the first national income tax. In addition to new tariffs, the bill called for a flat tax of 3% on income over $800 to help finance the war. President Lincoln would sign the bill into law on August 5. The Revenue Act of 1861 would be repealed by the Revenue Act of 1862, which replaced the flat rate with a progressive scale -- 3% on income over $600 and 5% on income over $10,000.