It Drapped Stonewall's Coffin

On May 1st 1863 about a year after the Confederacy adopted the Stars and Bars flag the decision was made to create a new flag that wasn’t like the Union’s Stars and Stripes. The new flag known as the Stainless Banner, included the canton [the familiar Confederate flag] to be square and about 2/3 the width on field of pure white. The white field of the flag was supposed to be symbolic of the purity of the Southern cause.

Among the first times this new flag, the Stainless Banner was used, was to drape General Thomas Stonewall Jackson’s coffin. It is this flag, which was order by Confederate President Jefferson Davis, to be place on Jackson’s casket that is now on display at the Museum of the Confederacy in Richmond. This flag would be modified one more time, when a red bar was added so the flag wouldn’t look like the white flag of surrender when the air was calm.

Some other information about the flag
The Confederate Battle Flag: America's Most Embattled Emblem

The Flags of the Confederacy: An Illustrated History