the question to the Frankfort diet, which decided in favour of the duke. Matters were now approaching a crisis. Prussia had long looked with jealousy upon the power of Austria, and considered a war with that country for the supremacy of Germany as sooner or later a necessity. The German people had for some time felt that there was not room for two great powers, each too great to submit to the other, one or other must give way before the country could obtain its proper place and influence in Europe. 1866. While both powers were professing the utmost desire for peace, each was actively preparing for war. Prussia entered into an alliance with Victor Emmanuel (27th March 1866), the latter undertaking to declare war against Austria as soon as Prussia commenced hostilities, while the former engaged to secure Venetia for her Italian ally. In the beginning of May orders were issued by the emperor of Austria for putting the whole army upon a war footing, and for concentrating a portion of it upon the Bohemian and Silesian frontiers ; and about the same time the Prus- War with sian cabinet issued orders to fill up to the war strength the Prussia. different branches of the service. On 7th June the Prus sian troops entered Holstein, and compelled the Austrians to retire, which they did without bloodshed. Austria was in an unprepared state when the war actu ally broke out, but the Prussian forces, on the other hand, were thoroughly equipped. The Austrian army in the north amounted to 247,000 men, besides the Saxon army at Dresden of 24,000, in all 271,000. The Prussian force consisted of three armies : the first, under the command of Prince Frederick Charles, consisted of 93,000 men, and was destined for Saxony and Bohemia ; the second, under the crown prince, numbered 115,000 men, and was to operate in Silesia ; while the third, or army of the Elbe, under General Herwarth, consisting of 46,000 men, was to march on the right flank of the first army, making in all 254,000 men, besides reserve corps of 24,300 men stationed at Berlin. General Benedek was appointed commander- in-chief of the Austrian army, and his forces were distri buted along the frontier that separates Moravia from Saxony and Silesia. On the 16th of June the Prussians entered Saxony, and marched upon Dresden, the Saxon army retiring to join the Austrians. On the 18th the Austrians entered Silesia, and the same day the Prussians took possession of Dresden. The three Prussian armies now advanced into Bohemia, and endeavoured to concen trate in the direction of Gitschin. On June 26th an en gagement took place between some companies of the first army and a body of Austrians at Podol, in which the latter were defeated, while, at Hiihnerwasser, the advanced guard of the Elbe army attacked some Austrian troops and drove them back towards Miinchengratz. Here, on the 28th, a severe struggle took place between the Prussians and the Austrians, supported by the Saxons, but the latter were ultimately driven back in the direction of Gitschin. In the meantime the second army, under the crown prince, had to ^march through the long and narrow passes of the mountains lying between Silesia and Bohemia. On the 27th one of the corps of this army, under General Stein- metz, engaged an Austrian force under General Ramming, and after a severe contest began to give way, but the crown prince coming up, the Austrians were driven back. The ^ same day another corps of this army took possession of Trautenau, but were attacked by the Austrians under General Gablenz, and sustained a repulse. Both sides having received reinforcements, the action was renewed next day at Soor, when victory ultimately declared for the Prussians. At Skalitz, on the 28th, the Prussians, under Steinmetz, were attacked by the Austrians under Archduke Leopold, but the latter were defeated, and the town taken by storm. It is said that on this occasion the archduke had disobeyed positive orders, which were on no account to make an attack. On the 29th, two divisions of the first army, under Generals Tiimpling and Werder, defeated the Austrians under Count Clam Gallas, at Gitschin, and took the town. The count, who occupied a strong position here, had orders not to attack the enemy, but these he had disobeyed, and the consequence was that Benedek, who had taken up a strong position at Dubenetz to oppose the army of the crown prince, found himself at once in a most dangerous situation, and was obliged to retreat towards Koniggratz. On the same day bodies of Austrians were defeated at Koniginhof and Schweinschadel. In these various engagements the Austrians lost in all from 30,000 to 40,000 men. Both sides now concentrated their forces in the direction of Koniggratz, and prepared for a general engagement. On June 30 the king of Prussia joined the army, and the battle of Koniggratz, or Sadowa, was fought on the 3d of July. The Austrians numbered about 220,000, and the Prussians probably about 240,000. The battle was long and well contested, both sides fighting with the greatest determination and bravery ; but at length the Austrians were broken, and obliged to retire. The Prus sians lost 359 officers and 8794 men, while the Austrians and Saxons lost in all about 44,200 men, of whom 19,800 were prisoners. This terminated what has been sometimes called the Seven Days War. The Austrians retreated to Zwittau and afterwards to Olmiitz. A portion of the Prus sians went in pursuit, but the king, with an army of up wards of 100,000 men, marched on towards Vienna, and reached Nikolsburg, July 18. After the battle of Konig gratz, the emperor, seeing the disastrous state of his affairs, resolved to cede Venetia to the Emperor Napoleon, so as to be able to bring his army in Italy against the Prussians, and he also expressed his willingness to accept the media tion of the latter to bring about a peace. The Archduke Albert, who had the command of the army in Italy, with which he had inflicted a severe defeat on the Italians at Custozza, was recalled to take the chief command in place of Benedek. An armistice, however, was agreed upon through the mediation of France (22d July). The preliminaries of peace were signed at Nikolsburg (26th July), and negotiations were afterwards carried on at Prague, where a treaty was signed (23d August). By this treaty Austria gave up to the kingdom of Italy Venetia and the fortresses of the quadrilateral, namely, Peschiera, Mantua, Verona, and Legnano ; recognised the dissolution of the late German Confederation, and consented to a new formation of Germany, in which she should have no part ; gave up all claim to the duchies of Holstein and Schleswig ; and agreed to pay a war indemnity of 40,000,000 thalers, less 20,000,000 allowed her on account of the duchies. Having thus obtained peace, the emperor now turned his attention to home affairs. Hungary was still in a very troubled and dissatisfied state. We have seen that she declined to send representatives to the Reichsrath, insisting on her right to self-government, and refusing to have any thing else. The plan of opposition she adopted was that of passive resistance, by the non-payment of taxes. At length, at the opening of the Hungarian diet at Pesth by the emperor in person, on December 14, 1865, he recog nised the necessity of self-government for Hungary so far as it did not affect the unity of the empire and the position of Austria as a great European power. He also recognised the Pragmatic Sanction as the basis on which a settlement of their difficulties was to be sought. At the opening of the diet on 19th November 1866, an imperial rescript, signed by the emperor, was read, in which he promised, by the appointment of a responsible ministry and the re storation of municipal self-government, to do justice to the constitutional demands of the Hungarians. In the end of