The great majority of princes assented to the project of the emperor of Austria, according to which a directory of five princes (Austria, Prussia, Bavaria, and two others) was to be at the head of the nation, assisted by a federal council and a federal assembly of 300 members, which was to meet every third year.

Although Prussia was to have an equal number of deputies in the federal assembly, the presidency in the directory and federal council was to remain with Austria. The reform association declared fur accepting the new constitution as a step in advance; while all the liberal parties of Germany decidedly, rejected it. Soon a foreign complication turned the attention of all parties from the conflict of their schemes of reconstruction to' a common defence of the German nationality. Frederick VII. of Denmark, in union with the predominant party of the country, had issued in March, 1863, a patent separating the duchy of Holstein from the common Danish monarchy, in order to unite Schleswig (which until then had been united with Holstein under one constitution) with Denmark proper. The federal diet summoned the Danish government to repeal the patent, as it encroached upon the right of Holstein, and thus of Germany, and threatened, in case of refusal, a "federal execution.1' On Nov.' 15 Frederick VII. died, and was succeeded, according to the stipulation of the London conference of 1852, by Christian IX., who on Nov. 18 proclaimed the incorporation of Schleswig with Denmark. But as the federal diet had never recognized the London conference, the people of the duchies, as well as a number of the smaller German states, recognized Prince Frederick of Augustenburg as duke of Schleswig-Holstein. Public opinion throughout Germany strongly, sympathized with this view, but Austria and Prussia decided to stand by the stipulations of 1851 and 1852, and insisted on carrying out the federal execution.

The federal diet on Dec. V, by 8 votes against 7, acceded to their demand and intrusted the execution to Hanover and Saxony. The German troops entered Holstein on Dec. 23, and the Danes withdrew without offering resistance. Prussia and Austria on Dec. 28 moved in the federal diet the occupation of Schleswig, in order to enforce the repeal of the law of Nov. 18. The motion was rejected, because the majority believed the question of succession would be prejudged by its adoption. In defiance of this resolution, Austria and-Prussia declared that they would now act in the matter, not as members of the confederation, but as great powers of Europe, and at once (February, 1864) marched their troops into Schleswig. On Feb. 5 the Danes evacuated the strong Dannevirke, and withdrew behind the intrenchments of Duppel, which were stormed by the Prussians on April 18. A peace conference of representatives of the great powers, which met in London on April 25, remained without result. The Danes evacuated Jutland and confined themselves to the islands; but when the Prussians on June 29 occupied Alsen, they gave up all further resistance, and in the preliminary peace concluded in July ceded Schleswig. Holstein, and Lauenburg to Austria and Prussia. The cession, which was confirmed in the definitive peace of Vienna, Oct. 80, was based entirely on the right of conquest, the question of the lawful succession in the duchies and the claims of the federal diet being ignored.

When Prussia after the conclusion of peace called upon Hanover and Saxony to withdraw their troops from Hol-stein, Saxony showed some intention to resist by force. A collision was averted by a resolution of the federal diet, which in accordance with the demand of Austria and Prussia declared the execution to be ended. The disagreement between Austria and Prussia now began to widen. Austria desired to have the administration of the duchies transferred to Prince Frederick of Augustenburg; Bismarck entered into negotiations concerning the annexation of the duchies to Prussia. The federal diet took an unavailing interest in the cause of Prince Frederick, and finally confined itself to a protest against the illegal solution of the Schleswig-Ilolstein question, while the crown jurists of Prussia undertook to prove that Christian IX. of Denmark was the lawful duke of Schleswig-Holstein, which therefore, in virtue of the peace of Vienna, belonged to Austria and Prussia. A better understanding between Austria and Prussia appeared to be established when the latter power, in April, 1865, concluded a commercial treaty with the Zollverein. On Aug. 14 the Gastein convention gave Austria the exclusive occupation of Holstein, to Prussia that of Schleswig, and annexed Lauenburg to Prussia. The resolution of another general assembly of deputies of all the German states, which was held at Frankfort in October, and which demanded the convocation of the diet of Schleswig-Ilolstein, was entirely disregarded by the two great powers.

Soon a new difficulty sprang up between Austria and Prussia. The permission given by the Austrian governor of Holstein, Gen. von Gablenz, to hold an anti-Prussian meeting at Altona, Jan. 28, 1866, led to a very angry exchange of diplomatic notes. Austria warned the other states against the ambitious schemes of Prussia in a circular note of March 16, and began to arm. As the states of the second rank did not conceal their entire sympathy with Austria, Prussia in April strengthened her position by an alliance with Italy, and also began to arm. At the same time Prussia made a bid for the sympathy of the masses of the people in the smaller states by moving in the federal diet, on April 0, the convocation of a general national assembly, to be elected by direct and universal suffrage. An understanding arrived at between Prussia and Austria to begin the disarmament on April 25 and 26 failed, as Austria refused to withdraw her army from the Italian frontiers. A peace congress, proposed by England, France, and Russia, likewise failed, because Austria demanded the exclusion of all negotiations concerning the extension of the territory of either disputant. On June 1 Austria transferred the derision of the Schleswig-Holstein question to the federal diet.