The events of the next seven years are familiar history.  In 1864 Prussia and Austria made war on Denmark, and obtained a joint sovereignty over the duchies of Holstein and Schleswig.  In 1866, with Italy as her ally, Prussia drove Austria out of the German Confederation; annexed Schleswig, Holstein, Hanover, Electoral Hesse, and Frankfort; and brought all the German States north of the Main, except Luxemburg, into the North German Confederation, of which the King of Prussia was President and Bismarck Chancellor.  When war was declared by France in 1870, the South German States also placed their forces at the King of Prussia’s disposal; and before the war was over they joined the newly established German Empire, which thus included all the territories of the old Confederation except German Austria and Luxemburg.  The old Confederation was a mere league of sovereign States; the new Empire was a nation.  To this Empire, at the close of the war, the French Republic paid an indemnity of five milliards of francs, and ceded Alsace and Lorraine.

In giving the German people political unity Bismarck realized their strongest and deepest desire; and the feeling entertained toward him underwent a sudden revulsion.  From 1862 to 1866 he had been the best hated man in Germany.  The partial union of 1867—­when, as he expressed it, Germany was “put in the saddle”—­made him a national hero.  The reconciliation with the people was the more complete because, at Bismarck’s suggestion, a German Parliament was created, elected by universal suffrage, and because the Prussian ministers (to the great indignation of their conservative supporters) asked the Prussian Deputies to grant them indemnity for their unconstitutional conduct of the government during the preceding four years.  For the next ten years Bismarck had behind him, in Prussian and in German affairs, a substantial nationalist majority.  At times, indeed, he had to restrain their zeal.  In 1867, for instance, when they desired to take Baden alone into the new union,—­the rest of South Germany being averse to entrance,—­Bismarck was obliged to tell them that it would be a poor policy “to skim off the cream and let the rest of the milk turn sour.”

Bismarck remained Chancellor of the Empire as well as Minister-President of Prussia until 1890, when William II. demanded his resignation.  During these years the military strength of the Empire was greatly increased; its finances were placed upon an independent footing; its authority was extended in legislative matters, and its administrative system was developed and consolidated.  Conflicts with the Roman Catholic hierarchy (1873-87), and with the Social Democracy (1878-90) resulted indecisively; though Bismarck’s desire to alleviate the misery which in his opinion caused the socialistic movement gave rise to a series of remarkable laws for the insurance of the laboring classes against accident, disease, and old age.  With a return to the protective system,