denounced for slackness in reporting intelligence, especially as to the entrance into Russia of contraband of war. An appendix descriptive of the state of trade in the districts led to the subsequent foreign office regulation requiring all secretaries of embassies and legations to furnish annual reports on the trade and finance of the countries in which they resided.
In March 1858 Loftus left Berlin to become envoy extraordinary to the Emperor of Austria (Malmesbury, Memoirs of an Ex-Minister, 1885, p. 428). He did all that he could to avert the coming war between Austria and France, but owing to a shy and reserved manner he did not exercise much influence at Vienna. Acting under the successive instructions of the foreign secretaries, Lord Malmesbury [q. v.] and Lord John Russell [q. v.], he made clear to Count Buol, the head of the Austrian government, the sympathy felt in England for the cause of the national liberation of Italy (Reminiscences, 1st ser. i. 377). On the outbreak of the war with Italy in April 1859 Loftus continued to keep Austrian statesmen informed of the strength of the English feeling against Austria.
Towards the end of 1860 the legation at Vienna was converted into an embassy, and Loftus was transferred to the legation at Berlin, where the 'Macdonald' affair was causing friction. Loftus was instructed to restore friendly relations, but he was soon immersed in the Schleswig-Holstein crisis, in which at first he frankly expressed personal views which were favourable to Denmark (ibid. 1st ser. i. 298 seq.). In September 1862 he met Lord John Russell, his chief, at Gotha during Queen Victoria's visit to Rosenau, and was informed of the intention of the government to raise the legation at Berlin to the rank of an embassy. He was disappointed in the well-grounded expectation that he would himself be immediately named ambassador. The office was conferred on Sir Andrew Buchanan [q. v.], and in January 1863 Loftus began a three years' residence at Munich, where Lord Russell considerately made the mission first class. At Munich he formed the acquaintance of Baron Liebig, the chemist, of whose beneficent inventions he made useful notes.
In February 1866 he returned to Berlin as ambassador. He at once perceived the determination of Prussia to solve her difficulties with Austria by 'blood and iron' (Reminiscences, 2nd ser. i. 43). The crisis soon declared itself. Loftus records a midnight talk with Bismarck on 15 June 1866, in the course of which the latter, drawing out his watch, observed that at the present hour 'our troops have entered' the territories of 'Hanover, Saxony and Hesse-Cassel,' and announced his intention, if beaten, to 'fall in the last charge.' On the British declaration of neutrality, which immediately followed the outbreak of the Austro-Prussian war Loftus commented : 'We are, I think, too apt to declare hastily our neutrality, without conditions for future contingencies' (ibid. i. 78). In July 1866 Loftus was created a G.C.B. under a special statute of the Order. During his residence at Berlin he was offered, subject to the Queen's permission to accept it, the Order of the Black Eagle, but steadily declined the honour. In March 1868 he was accredited to the North German Confederation ; and in November of the same year he was made a privy councillor. Loftus anxiously watched the complications which issued in the Franco-Prussian war of 1870-1, and when the conflict began he was faced by many difficulties. Bismarck took offence at the ready acceptance by the British government of the request that French subjects in Germany should be placed under its protection during the war ; averring that 'there is already a feeling that Her Majesty's government have a partial leaning towards France, and this incident will tend to confirm it' (ibid. ii. 288). Loftus and his secretary, Henry Dering, managed the complicated system of solde de captivité for the 300,000 French prisoners of war in Germany to the satisfaction of those concerned.
Already in 1861 Loftus had sagaciously urged in a communication to Lord Clarendon that England and France should take the initiative in ridding Russia of the obnoxious article in the Treaty of Paris which excluded ships of war from the Black Sea (ibid. 1st ser. i. 213). Russia's endeavour to abrogate the article by her sole authority in 1870 produced critical tension with England, which would have been averted had Loftus's advice been taken.
After the creation of the German Empire fresh credentials had to be presented to its sovereign ruler at Berlin. Loftus, who was desirous of a change, was at his own suggestion removed to St. Petersburg in February 1871, where he remained eight years. The moderation and humane disposition of Alexander II, and the marriage of his daughter Marie to the Duke of Edinburgh in January 1874
