Just a bit more about my proposal for changes to the scenario file. Right now, the game setup most certainly does not correspond to this
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The "territories" should just be colonial buildings, with one province in each state blanked out to allow the USA to claim these as states at a later date. In game terms, setting up territories as non-states is pretty much useless because you can make them states immediately (same continent) and you can march a billion men across without taking attrition. Keeping these as blank territories would mean 1) attrition and 2) dissuading players and AI from marching in with huge numbers of troops. The Confederate New Mexico event can simply cede all the US colonial buildings in southern Arizona and New Mexico to the CSA. At the end of any victorious war for the CSA, have a peace event that returns any non New Mexico colonial buildings from the CSA to the USA (the spoils of war do not include the midwest). Of course if the USA wins, it will inherit all the colonial buildings that the CSA had, so no event is needed there.

The "territories" should just be colonial buildings, with one province in each state blanked out to allow the USA to claim these as states at a later date. In game terms, setting up territories as non-states is pretty much useless because you can make them states immediately (same continent) and you can march a billion men across without taking attrition. Keeping these as blank territories would mean 1) attrition and 2) dissuading players and AI from marching in with huge numbers of troops. The Confederate New Mexico event can simply cede all the US colonial buildings in southern Arizona and New Mexico to the CSA. At the end of any victorious war for the CSA, have a peace event that returns any non New Mexico colonial buildings from the CSA to the USA (the spoils of war do not include the midwest). Of course if the USA wins, it will inherit all the colonial buildings that the CSA had, so no event is needed there.