From p. 16 of History of the Twenty-Ninth Division, “Blue and Gray”, 1917-1919:
It was soon realized that a divisional spirit or espirit must be encouraged, since the old organizations had been broken up. Remembering that the organizations in the War between the States which had special names or distinctive designations acquitted themselves unusually well, and that the names and designations of such organizations had in the minds of their members a tremendous sentimental value, suggestions were asked for a name for the 29th Division. As a result, the name of the “Blue and Gray Division”, which probably was the original conception of the Chief of Staff, Colonel Goodale, was suggested. The division was composed of men both from the North and South, and partly from organizations formed in the Capital of the United States, as well as in the former Capital of the Confederacy. Moreover, these men were trained in a southern camp (Anniston, Alabama) named in honor of a Federal General (George B. McClellan), and were commanded by an officer of the United States Army from the State of Maine. The designation “Blue and Gray” consequently was most appropriate, was adopted and met with unanimous approval. Major James A. Ulio, Division Adjutant, then suggested that the Korean Symbol of Life composed half of blue color and the other half of gray, be selected as the Divisional Insignia. This was done, and the insignia, which was first used to identify the property of the division, was later, upon arrival of the division in France, used to identify the men of the division. The symbol was worn on the left shoulder of each and every man, to indicate the equality of all officers and men in their affection for and service in the division. No separate symbols showing any difference in rank or grade were allowed to be worn, but on the contrary, the same symbol was worn by the newest recruit and by the Commanding General. Incidentally, the 29th Division was the first division to register its symbol officially with the Adjutant General of the Army.
Among the various units consolidated into the 29th were units from New Jersey, Maryland, Delaware, Virginia, and the District of Columbia. Among the “abolished” cavalry units were “three cavalry squadrons: the first, a newly organized squadron from the District of Columbia, formed largely of ex-college men and horsemen; the second, an old, well-organized, well trained squadron from New Jersey, including the famous Essex Troop; and the third, the First Virginia Cavalry, formerly the Richmond Light Artillery Blues Battalion – one of the oldest military organizations in the United States – which had been continuously in Federal service since June, 1916…”
Additionally, the 1st, 2nd and 4th Virginia Regiments were combined to form the 116th Infantry Regiment (also taking the name Stonewall Brigade as a point of military lineage) of the 29th.