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To me, "The South won the peace" means that the majority-Northern federal government was willing to give the South near-complete autonomy in racial matters rather than enforcing the 14th and 15th Amendments (there or anywhere) following the end of Reconstruction. The South had another 90 years to largely go its own way before the federal government started enforcing those amendments in the early 1960s -- which is why Civil War rhetoric and imagery were so popular among segregationists at that time.
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