Intrepid background

The Union Army Balloon Corps 
 
The Early Days
Shortly after Civil War broke out, Secretary of the Treasury Salmon P. Chase and Joseph Henry, the first Secretary of the Smithsonian Institution, suggested that the United States establish a balloon corps under the command of Professor Thaddeus Lowe. This corps would provide aerial reconnaissance for the Union armies. Secretary Chase arranged a meeting between Lowe and President Abraham Lincoln on June 11, 1861.
On June 17, 1861, after meeting with the President, Lowe demonstrated his balloon. He lofted upwards to a height of 500 feet in his balloon—the Enterprise—from the Washington Mall in the vicinity of where the National Air & Space Museum now stands. The balloon was filled with “street gas” [methane] from the city’s natural gas supply. In a stroke of genius Lowe took a telegraph up with him in the balloon and sent Lincoln the first-ever aerial telegram. 
The President immediately invited Lowe back to the White House and spent the evening with him, after which he gave him a note of introduction to General Winfield Scott, Commanding General of the United States Army. When Lowe presented the note to Scott the next morning, Scott's staff stonewalled him. Later that day Lincoln personally intervened and introduced Lowe to the General.
Military Operations
Lowe received funds to build the government’s first balloon on August 2, 1861 and continue demonstrating military usefulness of tethered balloons. The first U.S. balloon designed for military use—the Union—was ready for action on August 28. Because he was forced to inflate the balloon with natural gas from municipal lines, the balloon could not be moved far, which limited its operating radius to Washington D.C. and a few miles from the Potomac in Virginia.
On September 24, 1861, Lowe ascended to more than 1,000 feet  near Arlington, VA, across the Potomac River from Washington, D.C., and began providing intelligence on the Confederate troops located at Falls Church, VA, more than three miles away. Union guns were aimed and fired accurately at the Confederate troops without actually being able to see them—a first in the history of warfare. Soon after this event, General McClellan, believing in the balloon’s potential, established the “Aeronautics Department” or Balloon Corps under the control of the Topographical Engineers.
This triumph led the Secretary of War Simon Cameron to direct Lowe to build four additional balloons. Two more followed shortly. The fleet now consisted of the Intrepid (a first-ever replica of which will fly at Genesee Country Village & Museum beginning July 2012), Constitution, United States, Washington, Eagle, Excelsior and the original Union. The balloons ranged in size from 15,000 to 32,000 cubic feet. Each had enough cable to climb 1,000 feet.
Lowe continued providing tactical reports to the Union troops. He supplied information during the Peninsula Campaign, where he transmitted regular— sometimes hourly— reports on Confederate movements. During the battle of Fair Oaks, VA, Lowe continually telegraphed information on enemy troop positions. Arguably observations made during this battle may have been crucial to the Union victory.
Up in the Air: Making Hydrogen Portable
Gas was plentiful in Washington, D.C., but after inflation transporting the balloons to the battlefields was too dangerous and time consuming. Thaddeus Lowe set out to invent a portable gas generating device that could be used anywhere. 
He invented a copper-lined wooden tank, mounted on a wagon filled with water and iron filings. When sulfuric acid was added, lighter-than-air hydrogen gas was produced, thereby allowing the balloons to be inflated near any battlefield. 

The horse-drawn wagons were large and rectangular and each weighed about 1,000 pounds. Twelve of these wagons were built to service the balloons.

The Demise
Unfortunately, the Balloon Corps did not last until the end of the war. General George McClellan was relieved of his command in 1863 and replaced by General Joseph Hooker. Captain Cyrus Comstock, who was assigned to oversee the Corps, cut its funding and thus its effectiveness. Lowe was also accused of financial impropriety, and his pay was reduced. Lowe resigned from the Balloon Corps on May 8, 1863. By July 1863, without Lowe to promote it, the Balloon Corps had disbanded.