All German states outside Austria, save Bremen…

All German states outside Austria, save Bremen and Hamburg, are by 1867 members of the formidable Zollverein, a custom union that had been formed in 1834, at the initiative of Prussia, to remove the various obstacles (such as different weights and measures in German states) to economic exchange and growth by the new commercial classes.

It had created a national unity in economic matters at a time when Germany was divided.

The original Customs Union had not ended in 1866 with outbreak of the Austro-Prussian War, in which in which Austria had lost its political and diplomatic clout in the German Confederation; a reorganization emerges in 1867, when, at Prussia's demand, sixteen North German states and the three free cities join a new North German Confederation.

The new Zollverein is stronger, in that no individual state has a veto.

The Zollverein establishes a common German parliament for economic matters, a significant step in the political unification process.

The new Confederation’s constitution, prepared by Bismarck and adopted on April 16, 1867, provides for a bicameral legislature—a Bundesrat (Federal Council) and a Reichstag (Diet)—under the presidency of the King of Prussia, who controls its armed forces.

With the founding of the North German Confederation, consisting of twenty-two middle and small states, the Zollverein includes approximately four hundred and twenty-five thousand square kilometers, and will produce economic agreements with non-German states like Sweden and Luxembourg.

Historians have seen three Prussian goals: as a political tool to eliminate Austrian influence in Germany; as a way to improve the economies; and to strengthen Germany against potential French aggression while reducing the economic independence of smaller states.

The Customs Union creates a larger market for German-made farm and handicraft products and promotes commercial unification under fiscally sound economic parameters.

While the Union seeks to limit trade and commercial barriers between and among member states, it continues to uphold the protectionist barriers with outsiders.

The political strength of the Customs Union lies with the Prussians, whose promotion of the Little Germany solution of national political unification mirrors the Customs Union's economic solution.