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The German people wanted to break free from Napoleon, so they created the German Confederation. It was headed by Austria. The German Confederation was a weak attempt in unifying the Germanic states.
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Otto von Bismark was named Prime Minister by King William I. Bismark rose from Prussia's junker class. Within a decade of being named prime minister, he was named Chancellor of Prussia. He was a very smart and strategic leader.
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Austria and Prussia formed an alliance to fight against Denmark. They seized the provinces Schleswig and Holstein together. Then Prussia liberated Schleswig while Austria liberated Holstein.
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Bismark wanted to be the only German super power, so they tricked Austria getting in a war with them. Prussia had a superior army and this allowed Bismark to win in seven weeks. He made it seem like Austria had broke the alliance.
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Germany wanted to become a superpower in Europe. To do so, Bismark tricked Napoleon by editing a telegraph so it seemed like they were insulting a frenchman. So Napoleon III declared war on Prussia and lost within a few weeks, making Germany the new superpower in Europe, only behind Great Britian.
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To form the German Empire, William I was convinced to become Kaiser. There were two houses of Legislature. The Reichstag was considered the lower house, and the Bundesrat was considered the upper house.