The Confederacy did celebrate the 4th of July; they just did so for different reasons, and only through the first two years of the war. “After 1863 the South stopped celebrating the holiday. Confederate losses at Vicksburg, Miss., Gettysburg, Pa., Helena, Ark., and Port Hudson, La., early in July 1863 made it difficult for the South the celebrate the day...”

But in the first two years of the war, the Confederacy celebrated the day based on the pretext that they were fighting for the true meaning of what their forefathers fought for and drew various comparisons between their actions and the actions of the Revolutionary War heroes. “From the Southern point of view, this was the time to stress the principles of the Founding Fathers. Rather than celebrating the Union, Southerners recognized constitutional rights and ideas of independence.”

During the first Independence Day of the Civil War, there was disagreement amongst various Confederate factions on what the holiday would mean and whether or not it was appropriate to celebrate in light of soldiers dying on the battlefield. As a result, many of the places around the Confederacy had reduced celebration or no celebration at all; and some cities and states had extravagant celebrations, it all depended on the mood of where you were located.

To see this contrast we can look to some first hand accounts. “A Tennessean wrote to his newspaper that he had to check his almanac for the date, as there was no ‘gathering of the people, no procession, no tinseled military, no 4th of July readers and orators, no barbecues, nothing to remind one of the day we used to celebrate.’”

And on the counterpoint, “A passionate celebration in Augusta, Georgia provided an example of the general practices of the Fourth of July in 1861 across the South: ‘Business is, in a great measure, suspended her to-day. Confederate flags are waving in all parts of the city, and one amongst the most splendid waves majestically over the office of the Augusta Constitutionalist.’” There are further newspaper accounts of celebrations in Virginia, South Carolina, and Louisiana.

But by 1863 the general mood of the Confederacy had soured over this holiday. “The Richmond dispatch reminisced that in past celebrations, alcohol fueled the patriotic sentiments of Southerners, and everyone happily honored the nation. However, ‘the day is now changed. We have no holiday. The ruthless enemy who has trampled upon every principle and right commemorated by the day itself, given no intermission for festive enjoyments, were we so inclined.’”

The Union still celebrated the holiday throughout all four years of the Civil War. Much of the enthusiasm of these celebrations was in direct correlation to how well things were going on the battlefield—the celebrations differed drastically between 1862 and 1863.

“The Fourth of July, 1863, had a significant impact on the morale of the North. While previous Fourth of July celebrations in the Civil War were held in an air of uncertainty(The First Battle of Bull Run being fought only two weeks after in 1861 and the Seven Days having just concluded days before in 1862)…people now “were able to rejoice at a spending triumph won by these brave soldiers (The Union had just been victorious at Vicksburg and Gettysburg).’”

I recommend a masters thesis written by Jared Bond. He wrote a paper titled Competing Visions of America: The Fourth of July During the Civil War that deals exclusively with this topic.