MAXIMILIAN OUTLAWS REPUBLICANS 1865 total cost of the war, North and South, according to David A. Wells, was $8,165,237,000. In May the war debt was $2,808,549,437. On May 3 the last war loan was authorized. Congress imposed a tax on all due notes of State Banks after July 1, and the result of the law was to drive the notes of State Banks out of circulation, and establish more firmly the National Banks. After the surrender of General Lee many officers and men crossed the Mexican border and took part in the attack of General Cortinas at Matamoras. General Slaughter of the Confederate army opened negotiations with Marshal Bazaine for a transfer of 25,000 Confederate soldiers to Mexico. Governor Price of Missouri received authorization to recruit an imperial army in the Confederacy. Governor Harris of Tennessee, with Judge Perkins, Generals Magruder and Stone, Commodore Maury and Doctor Gwin, having become naturalized as Mexicans, became the prime movers of a colonization scheme of ambitious proportions. This was all that was needed to turn the scale in the North in favor of Juarez. A colony of armed Confederates, hostile to the Government of the United States, and backed by France, Austria, and Belgium, could not be tolerated on the Mexican border. Another attempt made by Maximilian to obtain the recognition of the United States in July resulted in signal failure. Recruiting offices on behalf of the Mexican Republic were opened in New York and other American cities. On October 3 Maximilian issued his notorious decree, known in Mexican history as the Bando Negro. In this fatal enactment all armed Republicans were proclaimed as outlaws. When taken with arms they were ordered to be shot within twenty-four hours. On October 13 the Mexican generals, Ortaga and Salazar, were shot under this decree. In Europe Austria and Prussia began quarreling over their respective interests in Schleswig-Holstein, that they had 1865 DEATH OF PALMERSTON wrested from Denmark for the common good of Germany. Prussia transferred her naval base from Dantzig to Kiel with every indication of her intention to retain the latter port as her own. Austria was plainly aiding the cause of Frederick of Augustenburg, claimant of the disputed duchy. Only King William of Prussia was still inclined to peaceful measures. He arranged a meeting with the Austrian Emperor at Gastein. War was for the moment avoided by the treaty of Gastein, signed on August 16. By the terms of the treaty, Lauenburg was sold to Prussia for 6,000,000 marks; Schleswig was placed under the control of Prussia, and Holstein under that of Austria. Kiel, the subsequent naval port of the Confederation, and Rendsburg, the subsequent fortress of the Confederation, were held in common. But Bismarck did not consider that this treaty settled matters. He saw that war with Austria was fast becoming unavoidable. An opportunity had presented itself, by the turn affairs had taken in Holstein, for augmenting the power of Prussia. There was but one way to attain his purpose; to wit: the conversion of the Schleswig-Holstein question from one of merely Prussian importance to one of national concern. Bismarck exclaimed in Parliament: "The great questions of the time are solved not by speech-making and the resolutions of majorities, but by blood and iron." Constant Troyon, the famous French landscape and cattle painter, died during this year. Shortly after the Parliamentary elections, Lord Palmerston, the Prime Minister, died at Brockett Hall, in Hertfordshire. It was as Foreign Secretary that Palmerston, familiarly called "Pam," obtained that reputation for commissions and vigorous initiative that made his name a word of exultation to his admirers. He was buried at Westminster Abbey. Earl Russell succeeded as Prime Minister, while Gladstone became the leader of the Ministry in the Commons. EVENTS OF 1866 Secret Alliance Between Prussia and Italy against Austria - Austria Increases Venetian Armament-Austrian Governor of Holstein Violates Treaty of Gastein-Prussians Occupy Holstein in Violation of Acts of Confederation-Prussia Declares Confederation Dissolved and Calls for New Confederation Without Austria-On Their Refusal to Enter New Confederation, Hanover, Saxony, and Hesse-Cassel are Occupied by Prussian Troops -Bavaria Comes to Their Aid-Prussia Prevents Junction of Bavarian and Hanoverian Troops-Hanoverians are Defeated at Langensalza-They Surrender and are Paroled-Austrians Defeat Italians at Custozza-Benedek Leads Austrians into Bohemia-They are Defeated in Repeated Engagements-Forced by His Government, Benedek Fights Moltke at Sadowa (Königgrätz) -Benedek's Defeat Decides the War-Prussians Defeat Bavarians and Enter Frankfort-Austria Cedes Venetia to France-Tegethoff, Russian Admiral, Defeats Persano, Italian Admiral, off Lissa-Peace Treaties at Prague and Elsewhere Provide for Austria's Withdrawal from German Confederation, the Formation of a North German Confederation, the Annexation of Hanover to Prussia, and the Admission of South German States to Zollverein-Bismarck Forms Secret Alliance Between All German States-Napoleon Restores Venetia to Italy-New Shogun of Japan Wars with Insurgent Daimios-American Army of Observation Sent to Mexican Border -Seward Demands of Napoleon III the Withdrawal of French Troops from Mexico-Napoleon Informs Maximilian that French Troops will be Gradually Withdrawn-Reduction of Troops' Pay Leads to Mutiny-Empress Carlotta Undertakes Mission to Napoleon III to Retain French Aid, and to Pius IX to Secure Assent to Sequestration of Church Property-She Fails and Becomes Insane -Congress Passes Over Johnson's Veto Civil Rights Bill to Establish Citizenship of Negroes-Cabinet Officers Resign-Strong Republican Congress is Elected-It Clashes with President on His States Rights Plan of Reconstructing Southern State Governments -Johnson Issues Amnesty to Rebels and Restores Right of Habeas Corpus in Southern States-Field Lays Working Atlantic CableDeath of Sparks, American Historian. N Prussia's attempt to adjust the affairs of Schleswig and Holstein but one ally could be counted upon by I Bismarck. This was Italy, which longed to come into possession of the Venetian provinces held by Austria. Secretly Bismarck concluded an offensive and defensive alliance with Italy on April 8. It was to hold only for the brief space of three months. Venetia was to fall to Italy; a territory of like value to Prussia; no separate peace was to be made with Austria. The treaty was to expire if in three months Prussia failed to declare war. Bismarck made the best use 1866 PRUSSIANS INVADE HOLSTEIN of his short time. On April 9 the Prussian Government at Frankfort proposed the reform of the German Confederation. A National Convention, composed of members to be directly elected by the people, was to decide upon the adoption of a constitution, based upon principles that treated the Schleswig-Holstein problem as a national issue and not as a piece of monarchic greed. These principles were later unfolded in a circular issued by Bismarck on May 27. Bavaria assented to the reform of the Confederation on condition that both Austria and Prussia, as the two leading Powers, would agree not to attack each other. To this Austria gave its immediate consent and the new Confederation was formed. In the meanwhile Napoleon III, to whom Lamarmora, the Italian Prime Minister, had unfolded Bismarck's stipulations, communicated with the Austrian Ambassador. Austria took alarm and made a tentative offer to cede the Venetian provinces in a peaceful arrangement. Italy hesitated to break faith with Prussia. Austria forthwith increased her Venetian armament. Bismarck seized upon this to charge Austria with insincerity as regarded her promises of peace. Preparations for war were hurried on both sides. Austria replied on June 1 by suggesting that the question be left to the Bundestag, despite the fact that Prussia had already expressly denied the competency of that body to discuss matters of national importance. Simultaneously, in obedience to the command of his Government, Von Gablenz, the Austrian governor of Holstein, summoned the Holstein estates to Itzehoe, "to hear the voice of the land in the matter of its destiny." This was a violation of the Gastein treaty. On June 7 a Prussian force, under Von Manteuffel, marched into Holstein. The Austrians retired on June 12, accompanied by the Duke of Augustenburg. Austria lodged a protest; claimed that Von Manteuffel's invasion of Holstein was a breach of the eleventh article of the Acts of Confederation, ANTI-PRUSSIAN ALLIANCE 1866 which provided that members of the Confederation could not levy war against one another; and moved that the forces of the Confederation, with the exception of the Prussian army, be immediately mobilized. The Austrian motion was carried on June 14 by an irregular vote. Prussia thereupon declared the Confederation dissolved, and submitted the draft of new Articles of Confederation, in which it was boldly declared that "the dominions of the Confederation shall consist of the previous States, with the exception of the imperial Austrian and the royal Netherland territories." With the fateful vote of June 14 the Bundestag expired. The entire nation was now divided into two great camps. To the standard of Austria flocked the Catholic clericals, who had ever revered the House of Hapsburg as their protector; the democrats, who detested the stern, Spartan militarism of Prussia; the financiers, who dreaded a depreciation in the value of Austrian paper; the South German "particularists" or "federalists," who wished to preserve the old forms of government, and feared that unity was synonymous with the absorption of Germany by Prussia. All these heterogeneous elements formed, with Austria and the dynasties of the lesser kingdoms, a solid phalanx, strengthened by the popular support of the masses. These were partly impelled by an instinctive antipathy against Prussian manners and curt speech, partly driven by fear of increased burdens of taxation and military service. On June 15 Prussia sent peremptory notes to Hanover, Saxony, and Hesse-Cassel, demanding the recantation of the votes they had cast in the Bundestag, a complete neutrality on their part, and their entry into the reformed Confederation. If Prussia's demands were granted, their sovereign rights were to remain unmolested; if refused, force was to be employed. The three States declined to accept the conditions offered. Within a week Hanover, Dresden, and Hesse |