Gen. Price declined to fight him in his chosen position, but drew his forces together and started to execute his cherished plan of advancing to the Missouri River and forming connection there with the troops which Gens. Harris and Green had been raising in northern Missouri, not seriously molested in their work by the Union forces under Gens. Pope and Sturgis. The action at Dry Wood was made the most of by the Secessionists, who claimed a defeat for the terror-striking "Jim" Lane. The casualties were insignificant for the forces engaged, as there were but five killed and 12 wounded on the Union side, and four killed and 16 wounded on the Confederate.
It was feared that after Gen. Price had moved forward to the Missouri River McCulloch would come up from Arkansas and take Fort Scott, which he had been authorized to do by the Confederate Secretary of War; but McCulloch seems to have had other ideas, and spent the weeks in inaction.
The situation of the Union men of southwest Missouri became gloomy in the extreme. The whole country was overrun with guerrilla bands hunting down the Union men, and not infrequently shooting them on sight.
Gen. Fremont had seriously alarmed Polk, Pillow and Thompson by his showy reinforcement of Cairo with 3,800 men. Though Pillow was reputed to have about 20,000 troops at his disposal, he was seized with a great fear, wrote to Hardee at Pocahontas urging him to come to his help, and limited the sphere of the operations of his dashing lieutenant, M. Jeff Thompson. Maj.-Gen. Polk seems to have also been deeply impressed, for he wrote to Pillow urging him to put his troops in trenches in the neighborhood of New Madrid, strongly fortify that place and stretch a chain across the river to prevent the passage of gunboats.
Then Polk had another tremor, and ordered Pillow to evacuate New Madrid at once, taking his men and heavy guns across the river to the strong works of Fort Pillow. Pillow, however, as insubordinate and self-seeking as he had been in the Mexican War, and thirsting for the distinction of taking Cape Girardeau, did not obey his superior's orders, but retained his forces at New Madrid. He had the audacity to write to his superior, "Withdraw your control over me for a few hours."
Pillow, merely hanging on to the remotest fringe of the State, assumed the title of "Liberator of Missouri", and his correspondence, orders and proclamations were headed, "Headquarters Army of Liberation."
About the same time an old acquaintance, Lieut-Gov. Thos. C. Reynolds, he of the ready pen and fluent phrases, taking advantage of a hasty journey of Gov. Jackson to Richmond, assumed full gubernatorial powers, set up his capital in Pillow's camp at New Madrid, and proceeded to clothe him with the most extraordinary prerogatives. He made himself the whole of the "Sovereign people of Missouri," and issued a proclamation withdrawing the State from the Union. He said that "disregarding the forms and considering only realities, I view an ordinance for the separation from the North and union with the Confederate States as a mere outward expression giving notice to others of an act already consummated in the hearts of the people." He then proceeded to establish a military despotism which made the worst of what had been said of Fremont pale before it. He clothed all the military commanders—not merely those of Missouri provided by the odious Military Act, but such Confederate commanders as Pillow and Hardee, who should enter the State—with a most absolute power over the lives and property of the people of Missouri.