[5] He then switched his principal focus into the private sector, taking a directorship with the Deutsche Unionbank, and was involved in the creation of several public companies.

Shortly after his election to the House of Representatives, in 1862 he presented a plenary resolution on the contentious issue of Prussia's military budget.

The background was the rejection, by the Progressive Party which Hagen represented, of increased financial provision for army reform.

The finance minister Robert von Patow [de] agreed with the sense of the Hagen Resolution, but resigned because he correctly concluded that the government had lost the confidence of the king.

The king appointed new ministers who were closer politically to his own conservative preferences, but who were unable to command a majority in the assembly.

The crisis escalated till September 1862 when the king appointed Otto von Bismarck to head the government.