I would remove US troops from the South, but keep a naval blockade while faking negotians for about five to ten years. This would force Britain and France to use Egyptian and Indian cotton, and put a strangle on the souths economy. Eventually, the south would be so destitute that it would collapse in on itself, and I would pick up the pieces.
1. Where would the Union be getting its raw material for 5 to 10 years? There was plenty of reason why Lincoln was hellbent on unity.
2. The blockade would resort to war with the Confederacy before 5 to 10 years came around.
3. There were no negotiations that would calm the Seceders down for 5 to 10 years.
If I were Lincoln, I would pretty much take the same course of action.
If I were Davis, I wouldn't want to be Davis.