The article is devoted to the analysis of the attempt to transform the Spanish monarchy in the Federal Republic and its legal regulation in the constitutional draft of 1873. The establishment of republican form of government was due to the actual impossibility and uselessness to restore the monarchy. It was also considered to be a condition for the federalization of Spain, a contribution to the realization the principle of sovereignty. The constitutional design of the Federation was based on the historical features of states of the Iberian Peninsula and multidimensional understanding of sovereignty. The idea of vertical and horizontal separation of powers provided in the constitutional project of 1873 became the basis of the desired state organization and of the functioning of public power. A novelty of the application of principle of separation of powers is the introduction of the forth power named connecting power (besides three classic ones – legislative, executive and judicial), which belonged to the President of the Republic. It was established to perform in the system of state bodies the functions of a head of state and of a mediator. The importance of the experience of 1873 is found in the analysis of the state organization of Spain according to the Constitutions of 1931 and 1978.