[6] Busch, _Our Chancellor_, vol. ii. p. 196 (English edit.).

Austria also was soon compelled to give way before the persistent
demands of the Hungarian patriots for their ancient constitution, which
happily blended monarchy and democracy. Accordingly, the centralised
Hapsburg monarchy was remodelled by the _Ausgleich_ (compromise) of
1867, and became the Dual-Monarchy of Austria-Hungary, the two parts of
the realm being ruled quite separately for most purposes of government,
and united only for those of army organisation, foreign policy, and
finance. Parliamentary control became dominant in each part of the
Empire; and the grievances resulting from autocratic or bureaucratic
rule vanished from Hungary. They disappeared also from Hanover and
Hesse-Cassel, where the Guelf sovereigns and Electors had generally
repressed popular movements.

Greatest of all the results of the war of 1866, however, was the gain to
the national cause in Germany and Italy. Peoples that had long been
divided were now in the brief space of three months brought within sight
of the long-wished-for unity. The rush of these events blinded men to
their enduring import and produced an impression that the Prussian
triumph was like that of Napoleon I., too sudden and brilliant to last.
Those who hazarded this verdict forgot that his political arrangements
for Europe violated every instinct of national solidarity; while those
of 1866 served to group the hitherto divided peoples of North Germany
and Italy around the monarchies that had proved to be the only possible
rallying points in their respective countries. It was this harmonising
of the claims and aspirations of monarchy, nationality, and democracy
that gave to the settlement of 1866 its abiding importance, and fitted
the two peoples for the crowning triumph of 1870.