Hi Alan, and Bryan,
Thanks for the ID help.
Here is how the flag was described by the correspondent:
"...was a flag with a crimson ground, fringed with golden bordering. On one side was a cross of eleven stars (shows a drawing of a Latin/Christian cross) over which was worked the well-known motto, 'In Hoc Signo Vinces." On the opposite side was a ebautiful wreath enclosing a crown in which are set eleven stars."
Supposedly the flag had Knights of the Golden Circle connections based on what Capt. Johnson told the writer. Johnson stated that his wife made the flag and then it was sent off to be embroidered.