The third national flag (also called "the Blood Stained Banner") was adopted March 4, 1865. The red vertical bar was proposed by Major Arthur L. Rogers, who argued that the pure white field of the Second National flag could be mistaken as a flag of truce: when hanging limp in no wind, the flag's Southern Cross canton could accidentally stay hidden, so the flag could mistakenly appear all white.
Rogers lobbied successfully to have this alteration introduced in the Confederate Senate. He defended his redesign as having "as little as possible of the Yankee blue", and described it as symbolizing the primary origins of the people of the South, with the cross of England and the red bar from the flag of France.
The Flag Act of 1865 describes the flag in the following language:
“The Congress of the Confederate States of America do enact, That the flag of the Confederate States shall be as follows: The width two-thirds of its length, with the union (now used as the battle flag) to be in width three-fifths of the width of the flag, and so proportioned as to leave the length of the field on the side of the union twice the width of the field below it; to have the ground red and a broad blue saltier thereon, bordered with white and emblazoned with mullets or five pointed stars, corresponding in number to that of the Confederate States; the field to be white, except the outer half from the union to be a red bar extending the width of the flag.”
—Flag Act of 1865
Despite the passage of the Flag Act of 1865, very few third national flags were actually manufactured and used in the field. Moreover, the ones made by the Richmond Clothing Depot used the square canton of the second national flag rather than the slightly rectangular one specified by the law.