What happened July 1867 AD

The flag was changed to have 37 stars. (for Nebraska)

German Confederation lasted until 1866 when Prussia founded the North German Confederation, a forerunner of the German Empire which united the German-speaking territories outside of Austria and Switzerland under Prussian leadership in 1871. This state developed into modern Germany. The North German Confederation was the German federal state which existed from July 1867 to December 1870. Although de jure a confederacy of equal states, the Confederation was de facto controlled and led by the largest and most powerful member, Prussia, which exercised its influence to bring about the formation of the German Empire. Some historians also use the name for the alliance of 22 German states formed on 18 August 1866 (Augustbündnis). In 1870–1871, the south German states of Baden, Hesse-Darmstadt, Württemberg and Bavaria joined the country. On 1 January 1871, the country adopted a new constitution, which was written under the title of a new "German Confederation" but already gave it the name "German Empire" in the preamble and article 11. The only princely member state of the Holy Roman Empire that has preserved its status as a monarchy until today is the Principality of Liechtenstein. The only Free Imperial Cities still being states within Germany are Hamburg and Bremen. All other historic member states of the HRE were either dissolved or are republican successor states to their princely predecessor states.

The North German Confederation was the German federation which existed from July 1867 to December 1870. It is the first period of the German nation state as it is known today as the Federal Republic of Germany.