Smith's home state of Kentucky became a border state when the American Civil War began in 1861. Some months afterward, Smith presented himself in Richmond, Virginia to serve in the Confederate States Army. Commissioned as a major general on September 19, he served in Northern Virginia as a divisional and "wing" commander. He fought in the Battle of Seven Pines near Richmond during the Peninsula Campaign.
On May 31, 1862, Smith briefly took command of the Army of Northern Virginia after Gen. Joseph E. Johnston was wounded at Seven Pines because he was the senior major general in Johnston's army. However, Jefferson Davis replaced Smith with Robert E. Lee the following day, June 1. On June 2, Smith became ill and took a leave of absence to recuperate.
In late August, Smith returned and took command of the defenses around Richmond, which was expanded to become the Department of North Carolina & Southern Virginia in September. In addition, he acted as interim Confederate States Secretary of War from November 17 through November 21, 1862.
Smith resigned his commission as a major general on February 17, 1863, and became a volunteer aide to General P. G. T. Beauregard for the rest of that year. Smith was also the superintendent of the Etowah Iron Works from 1863 until June 1, 1864, when he was commissioned a major general in the Georgia Militia, commanding its first division until the war's end.
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