This was regarded by Prussia as a termination of the Gastein convention; her troops were at once marched into Holstein, and the Austrian governor of Holstein was invited to reenter into the joint occupation of Schleswig. Austria denounced this act as a violation of the federal constitution, and on June 14 the federal diet, by a majority of 9 against 6, adopted the view of Austria and ordered the mobilization of the entire federal army, except the troops of Prussia. The states voting for this resolution were Austria, Bavaria, Saxony, Hanover, Wurtemberg, Hesse-Cassel, Hesse-Darmstadt, Nassau, and the small states forming the 16th class. The representative of Prussia at once declared that the majority of the federal diet had exceeded its authority, and that Prussia regarded the confederation as dissolved. On the following day, the governments of Hanover, Saxony, and Hesse-Cassel were requested by Prussia to take back their vote of the preceding day, to disarm, and to enter into a new confederation with Prussia, which in that case would guarantee their sovereignty; in case of refusal, the immediate opening of hostilities was announced. The three governments on the same day refused this demand, and on June 16 their territory was occupied by Prussian troops.

The brilliant campaign of the Prussians (see Prussia) against the Austrians, who had been joined by the Saxon troops, in Bohemia and Moravia (June 23 to July 22), and against the other federal troops in Thuringia and in the region of the Main (June 27 to the beginning of August), completed the dissolution of the confederation and secured the reconstruction of Germany on an entirely new basis. The preliminary peace of Nikolsburg, July 26, which was confirmed by the definitive peace of Prague, Aug. 23, excluded Austria from Germany, and provided for the establishment of a new confederation of the states N. of the Main. The states S. of the Main, Bavaria, Wurtemberg, Baden, and Hesse-Darmstadt, were left at liberty to establish a South German confederation. Schleswig-Holstein, Hanover, Hesse-Cassel, Nassau, and Frankfort were incorporated with Prussia. Even before the conclusion of the definitive peace Prussia had entered into offensive and defensive alliances with Wurtemberg (Aug. 13), Baden (Aug. 17), and Bavaria (Aug. 22). On Aug. 24 the last representatives of the old German confederation, who from Frankfort had removed to Augsburg, declared the work of the federal diet to be at an end.

The North German confederation {Norddeutsclier Bund) was established by treaties between Prussia and the smaller states during the period from Aug. 18 to Oct. 21. On Dec. 15 an assembly of plenipotentiaries met in Berlin to draft the constitution of the confederation, which was then submitted to the constituent North German Reichstag, which met in Berlin on Feb. 24, 1867, and on April 16 adopted by 230 against 53 votes the draft submitted to it. The king of Prussia, as president of the confederation, appointed Bismarck federal chancellor, and on July 1 the constitution went into operation. In February the South German states had held military conferences in Stuttgart to promote a greater conformity of their army organization with that of Prussia. Baden favored the adoption of the entire Prussian system; and when the other three states declined to go so far, though they admitted the desirability of greater uniformity, Baden concluded a special military convention with Prussia. Next to the adoption of the federal constitution, the most important event in the constituent Reichstag was an interpellation of Herr von Bennig-sen, one of the leaders of the liberal party, concerning the right of Prussia to garrison the federal fortress of Luxemburg. The grand duchy of Luxemburg, which formed a part of the old German confederation, showed the most decided opposition to entering the new North German, and Prussia had given her consent for the grand duchy to remain outside of the reconstructed Germany. Soon after negotiations had been begun between France and Holland for a sale of the grand duchy to France, Prussia had entered an emphatic protest against this scheme, and on March 30 the king of Holland had officiallv denied any inten-tion to sell Luxemburg. The full details of these negotiations only became known officially in consequence of the interpellation of Benning-sen, and created an extraordinary excitement throughout Germany. The expression of public opinion against the transfer of Luxemburg to France was no less decided in the south of Germany than in the north.

The grand duchy of Hesse concluded in April a military convention with Prussia, in virtue of which its military system was reorganized according to the Prussian, and the Hessian troops were placed under the chief command of the king. Wur-temberg also introduced several features of the Prussian system. No doubt could be entertained that, in case of war, northern Germany might safely rely on the support of all the South German states. But a conference of the powers which had signed the London treaty of 1839 found a peaceable solution for the Luxemburg question. The grand duchy was declared neutral territory under the c;uar-antee of all the powers represented at the conference; and the federal fortress was to be razed. This peaceable solution was hastened by the declaration of Bismarck that if the result of the conference should not be favorable to the preservation of peace, he would at once mobilize 900,000 men. On May 28 the minis-ters of the South German states were invited by Prussia to come to Berlin in order to put the Zollverein's treaty on a safe basis.

An agreement was arrived at, according to which, for the legislation on affairs of the Zollverein, the South German states would send a specified number of members to the North German fedoral council, and order the election of a proportional number of deputies, who in union with the North German Reichstag would constitute the customs parliament. A new attempt of Napoleon to meddle in the progress of German reconstruction by demanding that, in accordance with one article of the treaty of Prague, the people of northern Schleswig be allowed to express by a plebiscite their preference for Denmark or Germany, was sharply repelled by Prussia, Bismarck declaring that Prussia was unwilling to recognize the right of France to watch over the fulfilment of the treaty of Prague. An interview of Napoleon with the emperor of Austria in August was looked upon as a threatening movement against Germany, and not only the North German states, but even the Germans of Austria, strongly expressed themselves against the endeavors of France to interfere in any way in the internal affairs of the German nation. In the grand duchy of Hesse, the second chamber demanded that the entire grand duchy, instead of only the northern portion as hitherto, be admitted into the North German confederation.