Lacking a means for dealing with large numbers of captured troops early in the war, the U.S. and Confederate governments relied on the traditional European system of parole and exchange of prisoners. The terms called for prisoners to give their word not to take up arms against their captors until they were formally exchanged for an enemy captive of equal rank. Parole was supposed to take place within 10 days of capture. Generally it was granted within a few days, especially after a major battle where thousands of troops were involved. Sometimes parolees went home to await notice of their exchange; sometimes they waited near their commands until the paperwork was processed.
The system grew increasingly complex, cumbersome, and expensive as the war progressed and the number of parolees soared. The prospect of being sent home encouraged many men to allow themselves to be captured in battle or by straggling. Some parolees were permanently lost to she army when they failed to return to their units. Detention camps established by Federal authorities angered parolees, as did attempts to use them as guards, send them west to fight Indians, or give them noncombat assignments. Technically, paroled troops could not be given any duty that would free other soldiers for combat, an interpretation upheld by military courts.
While paroling was in force, many inequities surfaced in the system. Soldiers assigned to detention camps frequently suffered from shortages of food and clothing and poor sanitation and were victimized by a criminal element among them. The men often became pawns for the governments, officers at one point being denied parole until formally exchanged. Union authorities generally withheld parole and exchange from guerrillas, bushwhackers, and blockade runners, which resulted in retaliatory action by the Confederacy.
Finally admitting that the war was being prolonged by returning men to the ranks through parole and exchange--which by 1863 was the Confederate army's principal means of maintaining troop strength--Federal authorities severely restricted the program. The alternative, confining captured enemy troops to prison camps, became policy for the 2 belligerents.
Source: "Historical Times Encyclopedia of the Civil War" Edited by Patricia Faust