The Confederacy is politically divided between the land-holding gentry and the new commercial middle class. The former sees the future as an alliance with
against its growing commercial rival in the North. The latter sees the future in increased industrialization and self-sufficiency, a course which would bring back the hated tariffs to protect native industries, or at the very least increasingly reduce the South’s reliance on British goods. The increasing competition from Egyptian cotton on the world market has undercut the position of the traditional plantation owners, and the South has made some progress in industrializing and extending its rail net, but the progress has been uneven. The fact that the skilled industrial workers, particularly in the railroad industry, often have federal/reunificationist sympathies, and are sometimes seen as a Northern fifth column, makes the political dialogue more poisonous. Great Britain
Maximilian’s imperial reign in
was rendered unsustainable by the North’s victory in the Civil War – in our world. With the South’s independence, Maximilian instead gained a valuable ally. Although Maximilian perished by an assassin’s bomb in 1879, his adopted son Augustin II rules in his place, still fighting a smoldering rebellion kept alive, particularly in the northwest by Mexico assistance. US
This business of the Space: 1889 world raises the broader question of world-building in a Steampunk universe. To my mind, Steampunk worlds differ from our own in two important dimensions: geo-political and scientific. Socially, they are very similar, if not identical, to our own Victorian or Edwardian periods, which of course is the largest part of the Steampunk mythos.
Space: 1889 is a close match to the historic late-Victorian period, abounding with historical characters and with clearly recognizable political movements and governmental entities. I've recently been reading Scott Westerfield's Leviathan books, and they have the geo-political difference-o-meter set at about the same setting, although his story opens in August of 1914. At the other end of the scale are worlds which share no recognizable common history with our own, do not even purport to be set on our Earth. While many of these are more fantasy-oriented steampunk worlds, that is not universally the case.
Space: 1889 is also a fairly close match to actual historical technology, although by introducing lift-wood, and the changes necessary to the physical laws of the universe that device entails, it goes beyond some more conservative environments, such as Gibson's world in The Difference Engine (although Gibson's more conservative scientific changes have had more profound effects on society). The afore-mentioned Leviathan series by Westerfeld goes much further in its technological changes, postulating an early discovery of DNA by
Darwin and subsequent manipulation of it for bio-engineering which, by 1914, has dramatically changed the face of Europe and the nature of technology. Other worlds go farther still.
The delight of Steampunk, of course, is that there is no "right" way. There are wrong ways, of course -- changes which are not internally consistent, or which have ramifications on society which the author hasn't considered. But within the limits which apply to any science fiction or fantasy world-building, the issue is less what is permissible and more what is wanted. What purpose does the world serve? What sorts of experiences and situations do you want it to produce?
For myself, I enjoy weaving historical characters into the story, and playing off of some of their known interests, strengths, and of course weaknesses. That requires a world broadly similar to our own for those same people to be in approximately the same situations as their historical counterparts. Likewise, a broad similarity in geo-political issues gives the reader or gamer a comfortable starting point, and makes the departures from the actual timeline more noticeable.
The rules of story-telling, however, suggest that what departures are made be made with a purpose, and one which advances the story or enhances the atmosphere. Differences for the sake of difference -- the British Army looking just like it does in our world, except their tunics are purple instead of red -- aren't much more than annoying distractions.
At least that's the way I see it.