Two days after the Battle of Fort Sumter that initiated the American Civil War, Shepherd and his brother each enlisted in the 3rd Battalion of the District of Columbia volunteers.

The Organic Act of 1871 merged the various governments in the District of Columbia into a single eleven-member legislature, including two representatives for Georgetown and two for the County of Washington, to be presided over by a territorial governor.

Thus, Grant's inaugural appointment to the governorship was his friend, the financier Henry D. Cooke, "a gentleman of unimpeachable integrity"[7] and secretly a close political ally of Shepherd.

"[8]The warworn condition of Washington City in the late 1860s and the early 1870s, when it was little more than a hamlet of dirt roads, wooden sidewalks and open sewers and surrounded by farmland and large country estates, was such that Congress had for several years discussed relocating the seat of the Federal government westward to St. Louis, which would have led to ruin for the District of Columbia.

Two individuals, a butcher who was still on the premises at the time of the demolition and a young boy who had come with his dog to chase the rats who fled the structure, were killed in the process.

[citation needed] Once in office, Governor Shepherd engaged in a series of social reforms and campaigns that were progressive even by Radical Republican standards.

"[5] Generally, however, his gubernatorial term was "principally occupied in avoiding embarrassments in the conduct of the District's official business due to the inadequacy of the revenue which had been entailed by the demands for funds to meet the cost of executing street improvements.

"[12] However, despite the lack of finances, the massive public works project continued and intensified during Shepherd's term as governor of the District of Columbia.

In addition, Congress discovered that Shepherd had given preference to neighborhoods and areas of the District in which he or his political cronies held financial interests.

[citation needed] Although none of his actions was found to have violated any laws, the territorial government was abolished in favor of a three-member Board of Commissioners, which remained in charge of the city for nearly a century.

In 1876, however, he declared personal bankruptcy and, once his accounts were settled, moved with his family to Batopilas, Mexico, where he made a fortune in silver mining and instituted many of the same reforms he had championed in the District of Columbia.

[citation needed] A statue of Shepherd currently stands on Pennsylvania Avenue, NW, in front of the John A. Wilson Building, which now houses the offices and chambers of the Council and the Mayor of the District of Columbia), and has served as a symbol of his fluctuating reputation.

[citation needed] In 1979, during the first year of Mayor Marion Barry's administration, the statue was removed from its perch on Pennsylvania Avenue and warehoused in city storage.

[citation needed] Largely as a result of the efforts of Rimensnyder and those he persuaded, the Shepherd statue was returned in January 2005 to its previous place of honor.