The return of King William to his capital had been a triumphal progress; and Bismarck had shared to the full the new-born popularity of his master. He seized the occasion to make his peace with Liberal sentiment, and the bill of indemnity for past ministerial breaches of the constitution was carried in the new Prussian diet with enthusiasm. On the 24th of February 1867 the constituent diet of the confederation, elected by universal suffrage and the ballot, met in Berlin, and soon accepted in its essential features the constitution submitted to it. It was arranged that the headship of the confederation should be hereditary, that it should belong to the king of Prussia, and that legislative functions should be exercised by a federal council (_Bundesrat_), representative of the various governments, and by a diet (_Bundestag_) elected by the whole people.
The federal parliament began at once the task of consolidating the new institutions. In the sessions of 1869 and 1870 it established a supreme tribunal of commerce, sitting in Leipzig, and passed a new penal code. Great as were these results, they did not satisfy the aspirations of patriotic Germans, who, having so suddenly and so unexpectedly approached unity, longed that the work should be completed. A party called the National Liberals was formed, whose main object was to secure the union of South with North Germany, and it at once entered into peculiar relations with Bismarck, who, in spite of his native contempt for parliaments and parliamentary government, was quite prepared to make use of any instruments he found ready to his hand. There was, indeed, plentiful need for some show of concession to Liberal sentiment, if a union of hearts was to be established between the South and North Germans. The states south of the Main had issued from the war as sovereign and independent powers, and they seemed in no great haste to exchange this somewhat precarious dignity either for a closer alliance among each other or with the North German Confederation. The peoples, too, fully shared the dislike of their rulers to the idea of a closer union with North Germany. The democrats hated Prussia as "the land of the corporal's stick," and Bismarck as the very incarnation of her spirit. The Roman Catholics hated her as the land _par excellence_ of Protestantism and free thought. Nothing but the most powerful common interests could have drawn the dissevered halves of Germany together. This sense of common interests it was Bismarck's study to create. An important step was taken in 1867 by the conclusion of a treaty with the southern states, by which it was agreed that all questions of customs should be decided by the federal council and the federal diet, and that, for the consideration of such questions, the southern states should send representatives to Berlin. In reality, however, the customs parliament (_Zollparlament_) was of little service beyond the limits of its special activity. In the election to the customs parliament in 1868, Württemberg did not return a single deputy who was favourable to the national cause; in Bavaria the anti-nationalists had a large majority; and even in Baden and Hesse-Darmstadt, where the opposition to Prussia was less severe, a powerful minority of the deputies had no liking for Bismarck and his ways. Thus the customs parliament was kept rigidly to the objects for which it was founded, greatly to the disappointment of patriots who had not doubted that it would become an effective instrument for the attainment of far larger purposes. Had the completion of unity depended wholly on internal causes, it certainly would not have been soon achieved; but other forces, not altogether unexpectedly, came to Bismarck's aid. France had been irritated by the enormous increase of Prussian power, and even before the treaty of Prague was signed the emperor Napoleon III. indicated a wish to be "compensated" with the left bank of the Rhine. This was a claim exactly calculated to play into Bismarck's hands. The communication of the French emperor's original proposals to the South German governments, whose traditional policy had been to depend on France to save them from the ambitions of the German great powers, was enough to throw them into the arms of Prussia. The treaties of peace between Prussia and the South German states were accompanied by secret treaties of offensive and defensive alliance, under which the supreme command in war was to be given to the Prussian king. A common war against a common enemy now appeared the surest means of welding the dissevered halves of Germany together, and for this war Bismarck steadily prepared. There were soon plentiful signs of where this enemy was to be sought.