On the 4th of March, sixteen days after his victory, he was in disgrace. General Halleck ordered him to turn over the command of the army to General C. F. Smith and to remain himself at Fort Henry. This action of Halleck was the consequence partly of accidents which had prevented communication between them and caused Halleck to think him insubordinate, partly of false reports to Halleck that Grant was drinking to excess, partly of Halleck's dislike of Grant,—a temperamental incapacity of appreciation. After Donelson he issued a general order of congratulation of Grant and Foote for the victory, but he sent no personal congratulations, and reported to Washington that the victory was due to General Smith, whose promotion, not Grant's, he recommended. As to the reports of Grant's drinking, they were decisively contradicted by Rawlins, to whom the authorities in Washington applied for information. He asserted that Grant had drunk no liquor during the campaign except a little, by the surgeon's prescription, on one occasion when attacked by ague. The fault of failing to report his movements and to answer inquiries was later found to be due to a telegraph operator hostile to the Union cause, who did not forward Grant's reports to Halleck nor Halleck's orders to Grant.

Grant's mortification was intense. Since the fall of Donelson he had been full of activities. The enemy had fallen back, his first line being broken, and Grant was scheming to follow up his advantage by pushing on through Tennessee, driving the discouraged Confederate forces before him. He had visited Nashville to confer with General Buell, who had reached that city, and it was on his return that he received Halleck's dispatch of removal. For several days he was in dreadful distress of mind, and contemplated resigning his commission. It seemed as if Fate had cut off his career just as it had gloriously begun. But he made no public complaint. He obeyed orders and waited at Fort Henry. To some of his friends he said that he would never wear a sword again. But on the 13th he was restored to command. Halleck became aware of the facts, and made a report vindicating Grant's conduct, of which he sent him a copy. It was not until after the war that Grant learned that Halleck's previous reports had caused his degradation.

His first battle after restoration to command was an unfortunate one in the beginning, but was turned into a victory. He was advancing on Corinth, Miss., a railroad centre of the Southwest, where a large Confederate army under General Albert Sidney Johnston was collecting. All the available Union forces in the West were gathering to meet it. Grant had selected Pittsburg Landing on the Tennessee River, twenty miles from Corinth, as the place for landing his forces, and Hamburg Landing, four miles up the river, as the starting point for Buell's army in marching on Corinth. Buell was hastening to the rendezvous, coming through Tennessee with a large force. On the 4th of April Grant's horse fell while he was reconnoitring at night, and the general's leg was badly bruised but not broken.

Expecting to make an offensive campaign and meet the enemy at Corinth, he had not enjoined intrenchment of the temporary camp. So great was the confidence that Johnston would await attack that the enemy's proximity in force was discovered too late. Johnston led his whole army out of Corinth, and early on the morning of the 6th of April surprised Sherman's division encamped at Shiloh, three miles from Pittsburg Landing, attacking with a largely superior force. The battle raged all day, with heavy losses on both sides, the Union army being gradually forced back to Pittsburg Landing. Five divisions were engaged, three of them composed of raw troops, and many regiments were in a demoralized condition at night.

On the next day the Union army, reinforced by Buell's 20,000 men, advanced, attacking the enemy early in the morning, with furious determination. The Confederate forces, although weakened, were determined not to lose the advantage gained, and fought with desperate stubbornness. But it was in vain. A necessity of vindicating their courage was felt by officers and men of the Union Army. They had fully recovered from the effects of the surprise, and pressed forward with zealous assurance. Before the day was done Grant had won the field and compelled a disorderly retreat. In this battle the commander of the Confederate army, General Albert Sidney Johnston, was killed in the first day's fighting, the command devolving on General G. T. Beauregard. On the first day the Union forces on the field numbered about 33,000 against the enemy's above 40,000. On the second day the Union forces were superior. The Union losses in the two days were 1754 killed, 8408 wounded, and 2885 missing; total 13,047. Beauregard reported a total loss of 10,694, of whom 1723 were killed. General Grant says that the Union army buried more of the enemy's dead than is here reported in front of Sherman's and McClernand's divisions alone, and that the total number buried was estimated at 4000.

The battles of Shiloh and Pittsburg Landing together constitute one of the critical conflicts of the long war. Had the Confederate success of the first day been repeated and completed on the second day, it would have been difficult, if not impossible, to prevent the enemy from possessing Tennessee and a large part of Kentucky.

After this battle General Halleck came to Pittsburg Landing and took command of all the armies in that department. Although General Grant was second in command, he was not in General Halleck's confidence, and was contemptuously disregarded in the direction of affairs. Halleck proceeded to make a safe campaign against Corinth by road-building and parallel intrenchments. He got there and captured it, indeed, having been a month on the way, but the rebel army, with all its equipments, guns, and stores, had escaped beforehand. Grant's position was so embarrassing that during Halleck's advance he made several earnest applications to be relieved. Halleck would not let him go, apparently thinking that he needed to be instructed by an opportunity of observing how a great soldier made war. What Grant really learned was how not to make war.

After the fall of Corinth he was permitted to make his headquarters at Memphis, while Halleck proceeded to construct defensive works on an immense scale. But in July Halleck was appointed commander-in-chief of all the armies, with his headquarters in Washington, and Grant returned to Corinth. He was the ranking officer in the department, but was not formally assigned to the command until October. The intermediate time was spent, for the most part, in defensive operations in the enemy's country, the great army that entered Corinth having been scattered east, north, and west to various points. Two important battles were fought, by one of which an attempt to retake Corinth was defeated. The other was at Iuka, in Mississippi, where a considerable Confederate force was defeated.

In this period the energy and resourcefulness of General Grant were conspicuous, although nothing that occurred added largely to his reputation. He was, however, gathering stores of useful experience while operating in the heart of the enemy's country, where every inhabitant, except the negroes, was hostile. Both of the battles mentioned above were nearly lost by failure of his subordinates to render expected service according to orders; but he suffered no defeat. The service was wearing, but he was equal to all demands made upon him.