According to US Department of Veterans Affairs website
http://www1.va.gov/opa/speceven/memday/history.asp
Memorial Day History
Three years after the Civil War ended, on May 5, 1868, the head of an
organization of Union veterans — the Grand Army of the Republic (GAR) —
established Decoration Day as a time for the nation to decorate the
graves of the war dead with flowers. Maj. Gen. John A. Logan declared
that Decoration Day should be observed on May 30. It is believed that
date was chosen because flowers would be in bloom all over the country.
The first large observance was held that year at Arlington National
Cemetery, across the Potomac River from Washington, D.C.
The ceremonies centered around the mourning-draped veranda of the
Arlington mansion, once the home of Gen. Robert E. Lee. Various
Washington officials, including Gen. and Mrs. Ulysses S. Grant, presided
over the ceremonies. After speeches, children from the Soldiers’ and
Sailors’ Orphan Home and members of the GAR made their way through the
cemetery, strewing flowers on both Union and Confederate graves,
reciting prayers and singing hymns.
*Local Observances Claim To Be First* Local springtime tributes to the
Civil War dead already had been held in various places. One of the first
occurred in Columbus, Miss., April 25, 1866, when a group of women
visited a cemetery to decorate the graves of Confederate soldiers who
had fallen in battle at Shiloh. Nearby were the graves of Union
soldiers, neglected because they were the enemy. Disturbed at the sight
of the bare graves, the women placed some of their flowers on those
graves, as well.
Today, cities in the North and the South claim to be the birthplace of
Memorial Day in 1866. Both Macon and Columbus, Ga., claim the title, as
well as Richmond, Va. The village of Boalsburg, Pa., claims it began
there two years earlier. A stone in a Carbondale, Ill., cemetery carries
the statement that the first Decoration Day ceremony took place there on
April 29, 1866. Carbondale was the wartime home of Gen. Logan.
Approximately 25 places have been named in connection with the origin of
Memorial Day, many of them in the South where most of the war dead were
buried.
*Official Birthplace Declared* In 1966, Congress and President Lyndon
Johnson declared Waterloo, N.Y., the “birthplace” of Memorial Day.
There, a ceremony on May 5, 1866, honored local veterans who had fought
in the Civil War. Businesses closed and residents flew flags at
half-staff. Supporters of Waterloo’s claim say earlier observances in
other places were either informal, not community-wide or one-time events.
By the end of the 19th century, Memorial Day ceremonies were being held
on May 30 throughout the nation. State legislatures passed proclamations
designating the day, and the Army and Navy adopted regulations for
proper observance at their facilities.
It was not until after World War I, however, that the day was expanded
to honor those who have died in all American wars. In 1971, Memorial Day
was declared a national holiday by an act of Congress, though it is
still often called Decoration Day. It was then also placed on the last
Monday in May, as were some other federal holidays