South Carolinians defending Fort Moultrie in Charleston Harbor in 1776 raised one of the earliest flags of American liberty. The blue corresponded to their uniform, the silver crescent appeared as a badge worn on their caps. The cause for which they fought—liberty—was emblazoned on the crescent.
The Moultrie flag also known as the Fort Moultrie flag, Liberty flag or Crescent flag used in the heroic defense of Fort Sullivan (now Fort Moultrie, on Sullivan’s Island, in Charleston Harbor) against the British in June 1776, by Colonel William Moultrie, was the first American flag used in the South in the Revolution. It consisted of a dark blue field with a white crescent in the upper right-hand (dexter) corner.
Colonel, afterwards General Moultrie, states in his Memoirs that;
As there was no national flag at the time, I was desired by the Council of Safety (on September 13, 1775, on taking possession of Fort Johnson, on James Island, in the harbor) to have one made; upon which, as the State troops were clothed in blue and the fort was garrisoned by the men of the first and second regiments who wore a silver crescent on the front of their caps, I had a large blue flag made with a crescent in the dexter corner to be uniform with the troops. This was the first American flag displayed in the South.”
It was this flag that the gallant Sergeant William Jasper, of South Carolina, in the attack on Fort Sullivan, the following summer, fastened upon a sponge-staff and replaced upon the bastion in the midst of a furious fire, after it had been shot away by the enemy’s fleet and had fallen outside the parapet upon the beach. For his heroic act Governor Rutledge, the following day, presented him with his own sword, and thanking him in the name of his country, tendered him an officer’s commission which Jasper modestly declined.
A brief history of the Moultrie flag
On the 13th of Sept., 1775, Col. Moultrie received an order from the council of safety for taking Fort Johnson on James island, S. C.,  and a flag being thought necessary Col. Moultrie was requested to procure one by the council, and had a large blue flag made, with a crescent in the dexter corner to be uniform with the troops of the garrison who were clothed in blue and wore silver crescents in front of their caps,  inscribed “Liberty or Death.” He said
This was the first American flag displayed in the south.”
When Moultrie hoisted this flag the timid people said it had the appearance of a declaration of war, and the captain of the Tamar, then being off Charleston, would look upon it as an insult and flag of defiance. A union flag had been displayed at Savannah the preceding June.  June 28, 1776, the standard advanced by Col. Moultrie on the south-east bastion of Fort Sullivan, or Moultrie as it was afterwards named on account of his gallant defense of it, was the same crescent flag with the word LIBERTY emblazoned upon it. 
At the commencement of the action, the crescent flag that waved opposite the union flag upon the western bastion, fell upon the outside upon the beach. Sergeant Jasper leaped the parapet, walked the whole length of the fort, picked up the flag, fastened it on a sponge staff, and in the midst of the iron hail pouring upon the fortress, and in sight of the whole British fleet fixed the flag firmly upon the bastion. Three cheers greeted him as he leaped within the fort. On the day after the battle Gov. Rutledge visited the fort, and rewarded Jasper for his valor by presenting him with his own small sword, which he was wearing, and thanked him in the name of his country. He offered him a lieutenant’s commission, but Jasper who could neither read nor write declined it, saying
I am not fit to keep officers’ company, I am but a sergeant.”
On the day after the battle the British fleet left Charleston harbor. The joy of the Americans was unbounded, and the following day (June 30) the wife of Major Bernard Elliot presented Col. Moultrie’s regiment with a pair of elegant colors, one of them was of fine blue silk, the other of fine red silk, both richly embroidered. They were afterwards planted on the walls of Savannah (Oct. 9, 1778), beside the lilies of France. Lieutenants Hume and Buck who carried them having “fallen, Lieutenant Gray of the South Carolina regiment seized their standards, and kept them erect, until he was struck by a bullet, when brave Sergeant Jasper sprang forward, and had just fastened them on the parapet, when a rifle ball pierced him, and he fell into the ditch. He was carried to camp and soon after expired. Just before he died he said to Major Harry
Tell Mrs. Elliot I lost my life supporting the colors she gave to our regiment.” 
The declaration of independence was read by Major Elliot at Charleston, on the 5th Aug., 1776, to the people young and old and of both sexes assembled around liberty pole, with all the military of the city and vicinity, flags flying and drums beating. Among the flags were without doubt these standards presented by his wife. They were captured when Charleston surrendered, May 12, 1780, and were among the British trophies preserved in the Tower of London.
The general congress, having previously appointed a committee to prepare a plan, on the 13th of Oct., 1775, after some debate;
Resolved, That a swift sailing vessel to carry the carriage guns and a proportionable number of swivels, with eighty men be fitted with all possible dispatch for a cruise of three months.”
* * * It was also;
Resolved, That another vessel be fitted for the same purposes “and” that a marine committee consisting of Messrs. Dean, Langdon and Gadsden report their opinion of a proper vessel and also an estimate of the expense.”
On the 17th of Oct., the committee brought in their estimate and report, which after debate was recommitted, and on the 30th the committee reported that the second vessel be of such a size as to carry fourteen guns and a proportionate number of swivels and men ; and it was further resolved that two more vessels be fitted out with all expedition j the one to carry not exceeding twenty guns, and the other not exceeding thirty-six guns with a proportionate number of swivels and men to be employed for the protection and defense of the United Colonies, as congress shall direct. Four new members were added to the committee, viz: Mr. Hopkins, Mr. Hewes, Mr. R. H. Lee and Mr. John Adams. 
On the 9th of Nov., 1775, it was;
Resolved, That two battalions of marines be raised, to be enlisted and commissioned to serve for and during the present war between Great Britain and the colonies, and to be considered as a part of the continental army of Boston, particular care to be taken, that no persons be appointed or enlisted into said battalions but such as are good seamen, or so acquainted with maritime affairs as to be able to serve to advantage by sea, when required.”
By a resolution of the 3Oth, they were ordered to be raised independent of the army ordered for service in Massachusetts.
 Holmes’s Annals.
 Col. Moultrie’s Memoirs of the Revolution, vol. I, p. 90.
 See ante.
 Bancroft’s History of the United States.
 Lossing’s Field Book of the Revolution, vol. n, pp. 532, 551.
 Journal of Congress, vol. I, p. 2,04.