Hello,
If you study military unit flags prior to the Civil War you will note that those flags are square as well. The battle flags of the major armies of the Napoleonic Wars were all square and US flags of the Civil War were also square (6 by 6 1/2 feet overall size).
Go to our CS flags website, Flags of the Confederacy (www.confederateflags.org) and you will see the most detailed history of CS flags on the Internet - and the most historically accurate!
By the way, the first issues of the ANV battle flags did not have white borders.
Greg Biggs