28 JULY 1866, Page 1

The terms offered by Prnasia and Italy to the Kaiser

are moderate in the extreme, too moderate, we fear, for permanent peace. Austria is to retire from the Germanic Confederation, but to remain at liberty to form a new league among the German States south of the Main, to pay an indemnity for the expenses of the war, to cede Venetia to Italy direct or to its own inhabitants, and to discuss the possible cession of the Italian Tyrol. Prussia is to receive the Elbe Duchies, and to annex the territories lying within her dominions, and containing about 3,000,000 of people, that is, Hesse-Cassel, Brunswick, South Hanover, and perhaps Leipsic, and to be recognized as sole representative for diplomatic, military, and commercial purposes of Germany from Jutland to the Main. Italy, receiving Venetia, and it may yet be the Italian Tyrol, will accept also the Venetian debt—about 20,000,000/. Of these terms only one, the exclusion of Austria, is yet known to have been accepted, and it is believed that a diplomatic battle has been raging round the question of the Tyrol, the indemnity money, which galls Austria cruelly, and the rights of her few allies, more especially Saxony, King John's corps d'armle having actually fought at Koniggratz. It is not quite beyond possibility that this worthy man, who is one of the best of the Princelings, may find himself minus all Saxony, but plus the Grand Duchy of Posen and certain possibilities.