ABSTRACT
Before 1866 Germany as a political entity did not exist. After the dissolution of the Holy Roman Empire in 1806 and the defeat of Napoleon in 1814, a loose confederation consisting of 38 states was established. The rulers of the individual states possessed sovereignty over their territories and there was no German head of state or parliament, only the rather ineffective Federal Diet which met at Frankfurt. Prussia and Austria were the largest and most powerful members of the Confederation. During the period 1815 to 1848, known as the Vormärz, Prussia began to consolidate her economic strength aided by the formation of the German Customs Union (Zollverein) while Austria, which chose to remain outside this trading network, continued as the dominant political and cultural force within the Confederation. However, in economic terms, while Prussia was busy building railways and exploiting raw materials, Austria, under the arch-conservative Metternich remained a comparatively backward state.
