I ran across this in a book I just purchased. Though the book contains very little about the Cherokee or the Civil War in Indian Territory, it does contain Slover's description of what appears to be the flag presented by Albert Pike, CSA Indian Commissioner, to Col. John Drew, 1st Cherokee Mounted Rifles.
Note that Slover, "The Missionary", oddly refers to himself in the 3rd person. Slover was the first Southern Baptist Missionary in the Cherokee Nation and served in that capacity 1857-1862.
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Slover, James Anderson; (edited by Barbara Cloud); Minister to the Cherokees: A Civil War Autobiography
Page 63
The Missionary was a looker on on the day the treaty was returned from the Confederate Government at Richmond, Va., and the one thousand Indians were received as Confederate soldiers. He saw the white flag with a blue half moon sewed on it with a red star located just between the two horns of the moon. The red star represented the Cherokee Nation, the half moon represented the Confederacy.
The description of the "horns of the moon" seems to suggest this was a crescent moon instead of a "half moon". The "one thousand Indians" are the 1st Cherokee Mounted Rifles commanded by Col. John Drew.
Page 66
…But there was doubtless an underground communication that reached Blunt on the return of the messenger, because the next day after the surgeon and the young lady escort left the Chief’s, the Treaty Regiment of Confederate soldiers which were in camp on the Prairie nearby mutinied. Their Colonel had to flee for his life with ninety of his men, and he lost his hat. The whole of the Regiment except the ninety raised a white flag with a red star in the center and marched in single file to Gen. Blunt’s headquarters.
It appears that the "blue moon" was removed by the Loyal Cherokee when they defected to the Union Army. In July 1862, the 1st Cherokee Mtd Rifles (Drew's) almost entirely defected to the Union army and were mustered into the 2nd and 3rd Indian Home Guards (aka the Union Indian Brigade).
Slover is describing the events in July 1862 during the 1st Indian Expedition when Union Capt. Greeno and Dr. Kirkpatrick met with Chief John Ross at Park Hill, Cherokee Nation (Indian Territory, now Oklahoma).