Memorial Day was originally known as Decoration Day because it was a time set aside to honor the nation's Civil War dead by decorating their graves. It was first widely observed on May 30, 1868, to commemorate the sacrifices of Civil War soldiers, by proclamation of General John A. Logan of the Grand Army of the Republic, an organization of former sailors and soldiers.
Memorial Day officially became a federal holiday in 1971.
Reference: http://www.history.com/topics/memorial-day-history
