Treaty of Prague, 23 August 1866

Background. The German Confederation, created in 1815, dissolved following Prussia's victory in the Austro-Prussian War. The conflict proved the Confederation's inability to combine federal troops against Prussian secession. The Peace of Prague formalized this dissolution, ending the dispute over which country would dominate the German states.

Treaty Terms. The treaty was lenient toward the Austrian Empire, as Otto von Bismarck persuaded King Wilhelm I that maintaining Austria's future place in Europe was preferable to harsh terms. However, southern German states outside the new Confederation were required to pay large indemnities to Prussia.

Dissolution and Succession. Austria accepted the dissolution of the German Confederation in the treaty. Thirty-four member states remained at the time of final dissolution. The North German Confederation, formed five days prior as a military alliance, succeeded the old body, combining German states north of the river Main.