Prussia, now master of Germany, annexed Hanover, Hesse-Cassel, Nassau and the city of Frankfort, which increased its population by four and a half millions. The rest of the northern states as far as the Main were to form under its direction the Confederation of Northern Germany (proclaimed July 1, 1867), with a constitution exactly the same as that of the German empire of today. As for the southern states, they remained independent, but signed military agreements which connected them with Prussia. Napoleon III tried in vain to obtain a compensation for that enormous increase of power. To the first overtures which he made to this end (he wanted the Palatinate) Bismarck answered with a flat refusal and a threat of war. He added, however, that he would consent to an enlargement of France from Belgium, a project which he was afterwards careful to mention as coming from the Paris cabinet. Bismarck had succeeded in humbling Austria and reducing its importance among the great Powers of Europe, and had expanded Prussia alike on the north and south and made it decisively the ruling nation in Central Europe. As we have seen, it had concluded military agreements with the states of southern Germany. It held them also in another manner, namely, by means of the Zollverein, signed anew on June 4, 1867. But it was as yet far from having brought about a peaceful realization of unity. The southern states, not merely the sovereigns only, but the peoples as well, had always shown little taste for Prussian leadership, and after 1866 this feeling was very visible. It was for that reason that Bismarck had need of a war against France to strengthen his position. Union against the foreigner was the cement with which he hoped to complete political unity. Such a war came near breaking out in 1867 in relation to Luxembourg. Napoleon III keenly desired to have at least that country as compensation for Prussia’s aggrandizements, and the king of Holland was disposed to cede his rights for a consideration. But Bismarck, after having secretly approved of the bargain, officially declared his opposition to it. Napoleon, hampered at one and the same time by the Paris Exposition of that year and by the bad condition of his army, was too happy to escape from embarrassment, since it was evident that the Prussians were not willing to evacuate the fortress of Luxembourg, by obtaining with the aid of the other Powers that the little duchy be declared neutral and the walls of its capital destroyed.