As I understand it, the problem is this. The actual “fair market value” for all the slaves owned by the major stakeholders in the South was a sum of money greater than the value of all the land and buildings in the entire South. The Federal government could not have offered fair compensation because the expense would have seemed enormous.
Without compensation, the wealthier plantation owners were not going to give up their property without a fight, and they had the power to convince the majority of the citizens in those states to stand with them.
Furthermore, once fighting began, neither side could rationally look at the losses they were taking and agree to a settlement because of a human reasoning error called “Sunk cost - Wikipedia”
Once a sufficient number of soldiers had died in the early battles, neither side could give in without making their sacrifices seem “in vain”. George W Bush gave similar reasoning for why the U.S. could not pull out of Iraq immediately during his term (even though at that point, the WMD hunt had been concluded, Sadaam was deposed, and there was nothing more the United States was likely to gain by remaining. However, G W B wanted to leave the country as a stable friendly democracy as intended, not a warring wasteland)
Thus, the fighting went on until it became physically impossible for it to continue in any meaningful way.
And, as I understand it, the numerical cost of the civil war, including opportunity costs and the losses of 600,000 able bodied workers who would otherwise have lived perhaps 30-40 more years on average, vastly exceeded what a compensated buyout of the slaves would have cost.
This seems like a paradox. The actual decisions made were counterproductive to the people who made them, yet they seem unavoidable.
There’s some real Civil War buffs here on SD : how could it have gone down differently?