The Flanagin administration had the humiliating duty of presiding over a government in exile. In the summer of 1863, the defeat of the only major Confederate army in Arkansas at Helena on July 4 and the end of the Vicksburg campaign made it possible for Union forces to move into the interior of Arkansas. Facing an overwhelming force, the Confederate army in Arkansas moved out of Little Rock on September 10, 1863. The entire state government abandoned the capital city and relocated at Washington in southwestern Arkansas.

The course of the war produced an even more dramatic political trend following the initial support of secession. By 1863, there were few reasons to be hopeful of Confederate success in Arkansas. Federal troops marched into Arkansas early in 1862 and never left again. A federal victory at Pea Ridge on March 2-3, 1862, was followed by the withdrawal of the Confederate troops that had served there into Mississippi. Confederate Gen. Thomas Hindman, former Arkansas Congressman, successfully resisted the subsequent effort of the Union Army under Gen. Samuel A. Curtis to capture Little Rock, but Curtisí army still managed to march across northeastern Arkansas and seize Helena. Hindmanís declaration of martial law, and his use of draconian measures in his efforts, offended many Arkansans who saw them as an infringement on their liberties. Later in 1862, another Confederate force was defeated in northwestern Arkansas at Prairie Grove. The capture of Fort Smith and Little Rock in September 1863, left over half of Arkansas under federal control. As conditions worsened, many politicians decided to return to the Union.

When federal troops occupied Little Rock, the city saw an influx of men who sought to reestablish a loyal Union government. Col. Edward W. Gantt of the 12th Arkansas Infantry was typical of this new type of Unionist, one that might better be called a Reconstructionist, for they were ready to reconstruct the Union. Gantt was joined by others like Jesse Turner of Van Buren, a delegate to the secession convention who had voted to leave the Union after Fort Sumter. Even planters such as Anthony A. C. Rogers of Pine Bluff had become convinced the Confederate cause was hopeless.