Bismarck had long been convinced that the old order he so ardently defended would have to make peace, on its own terms, with the liberal middle class and nationalists. Impressed with Napoleon III’s example, he realized that nationalists were not necessarily hostile to conservative, authoritarian government. Moreover, the events of 1848 convinced Bismarck that the German middle class could be led to prefer national unity under conservative leadership rather than a long, uncertain battle for truly liberal institutions. Thus during the Austrian war, he increasingly identified Prussia’s fate with the “national development of Germany.”

To consolidate Prussian control, Bismarck fashioned a federal constitution for the new North German Confederation. Each state retained its own local government, but the king of Prussia became president of the confederation, and the chancellor — Bismarck — was responsible only to the president. The federal government — William I and Bismarck — controlled the army and foreign affairs. There was also a legislature with members of the lower house elected by universal male suffrage. With this radical innovation, Bismarck opened the door to popular participation and the possibility of going over the head of the middle class directly to the people, as Napoleon III had done in France. All the while, however, ultimate power rested in the hands of the Prussian king and army.

In Prussia itself, Bismarck held out an olive branch to the parliamentary opposition. Marshaling all his diplomatic skill, Bismarck asked the parliament to pass a special indemnity bill to approve after the fact all the government’s spending between 1862 and 1866. With German unity in sight, most of the liberals eagerly cooperated. The constitutional struggle in Prussia ended, and the German middle class came to accept the monarchical authority that Bismarck represented.