In June 1866 Britain’s Liberal government fell and, after some delay, Lord Clarenden was replaced as foreign minister by Lord Stanley in July. Shortly thereafter Loftus offered this assessment of German affairs:
At this time I wrote to Lord Stanley that I could not view with any dissatisfaction or fear of danger to England an increase of power to Prussia. She was the great Protestant State of Continental Europe. She represented the intelligence, the progress, and the wealth of Germany. We have, I said, nothing to fear from her. She will become a Power of great importance in maintaining the peace of Central Europe. She will gradually advance in a constitutional system of government, and she will play the part of a moderator in Europe. We have much in common with her – our race, our religion, our mutual interests are all interwoven with Prussia, and our political interests should be identical. Why, I continued, should not Germany be allowed to constitute herself as she likes, and as Italy has done?
In a letter to Lord Stanley dated August 4, 1866 – written shortly after the preliminary armistice agreed at Nikolsburg on 26 July – Loftus continued his analysis:
The annexation of all the States of Northern Germany to the [River] Main will give to Prussia an increase of about four millions of population. Thus in one month will have been effected, with a rapidity and success unparalleled in history, changes which even Count Bismarck, in his most elated moments, never could have anticipated. Indeed, so great, so unexpected has been the success of the Prussian arms, that it is not unlikely to prove an embarrassment, and even a danger, to the political system which Count Bismarck is aiming to establish. His object, and that of the military party, is to create a great and powerful Prussia, extending from the Baltic to the Main, having full command of the maritime ports on the northern coasts, and the important and strategic maritime position of the Elbe Duchies. On the other hand, the desire of the Liberal party in Prussia and in Germany is to create an united Germany under a strong Power – that Power being Prussia – represented by a national parliament, to be established on the basis of the constitution framed by the Frankfort Assembly in 1849. They look to the fulfilment of their long-cherished dream of a German Empire – uniting the whole German nation under one command. But to attain this end (and they judge that the propitious moment had arrived) Prussia must be fused into Germany, whereas the object of Count Bismarck was to fuse Germany into Prussia.
It is to this point that public agitation will now direct itself, not only in Prussia, but throughout Germany. the weakness and political disorganisation displayed by the Southern States in the late struggle offer a convincing proof that there can be no material force or energy of action where there is a want of unity; and the sad experience acquired by the Civil War is a warning to the South German population that the recurrence of a similar misfortune can alone be obviated by the establishment of an United Germany under one supreme head, with a national representation forming the link of union between the several States.