2 fleet flagships.
4 squadrons, each of 8 battleships.
8 large cruisers for scouting purposes.
24 small cruisers for scouting purposes.

Foreign Fleet.

3 large cruisers.
10 small cruisers.

Reserve.

4 battleships.
3 large cruisers.
4 small cruisers.

The new Act was based upon the same calculation of the effective life of ships as the one of 1898, and provided that, except in the case of total loss, battleships were to be replaced after twenty-five years and cruisers after twenty years. It was provided that the age of ships was to be reckoned from the grant of the first instalment in payment for the ship to be replaced to the passing of the first instalment in payment for the ship to be built as "substitute" (Ersatzschiff). It was proposed to keep half the battle squadrons—the First and Second—fully manned on a war footing, together with one-half of the torpedo craft and all the school-ships and auxiliary vessels. The Third and Fourth battle squadrons were to form the Reserve Fleet, half the ships of which were to be kept in permanent commission. The Act also made provision for nucleus crews for the second half of the torpedo-boats, for the requirements of ships serving abroad, and for the needs of the shore establishments.

More remarkable, perhaps, than the actual terms of the Navy Act was the character of the explanatory Memorandum put forward by the Navy Department.[9] In this notable document occurs the following statement of the new naval policy of the German Empire:

"To protect Germany's sea trade and colonies, in the existing circumstances, there is only one means: Germany must have a battle fleet so strong that, even for the adversary with the greatest sea-power, a war against it would involve such dangers as to imperil his position in the world.

"For this purpose it is not absolutely necessary that the German battle fleet should be as strong as that of the greatest naval Power, because a great naval Power will not, as a rule, be in a position to concentrate all its striking forces against us. But even if it should succeed in meeting us with considerable superiority of strength, the defeat of a strong German fleet would so substantially weaken the enemy that, in spite of a victory he might have obtained, his own position in the world would no longer be secured by an adequate fleet."

The Memorandum well repays study in the light of subsequent events. Almost at the moment of its publication Admiral von der Goltz, a former Chief of the Admiralstab, gave a less reserved exposition of German policy, thus reflecting the opinions held by the naval officers responsible for the character of the proposed expansion of the German Fleet.

"Let us consider," he said, "the case of a war against England. In spite of what many people think, there is nothing improbable in such a war, owing to the animosity which exists in our country towards England, and, on the other side, to the sentiments of the British nation towards all Continental Powers, and in particular against Germany. These are not Chauvinistic exaggerations, but the opinion of the whole of the people of Great Britain, who are jealous of our commercial development. If England should ever lose her mercantile supremacy on the seas, the decline of her naval dominion would only be a question of time, and she realizes the fact instinctively. Of course the British Government will make every effort to prevent the violent explosion of these sentiments, preferring peaceful competition to war. But how long can that last? Violence becomes a right to a people which fears for its existence.

"The opinion is generally held in this country that any resistance against England at sea would be impossible, and that all our naval preparations are but wasted efforts. It is time that this childish fear, which would put a stop to all our progress, should be pulled up by the roots and destroyed.

"At this moment (1900) we are almost defenceless against England at sea, but already we possess the beginnings of a weapon which statesmanship can put to a good use, and our chances of success in a war against England grow more favourable day by day.

"The maritime superiority of Great Britain, overwhelming now, will certainly remain considerable in the future; but she is compelled to scatter her forces all over the world. In the event of war in home waters, the greater part of the foreign squadrons would no doubt be recalled; but that would be a matter of time, and then all the stations oversea could not be abandoned. On the other hand, the German Fleet, though much smaller, can remain concentrated in European waters.

"With the increases about to be made it will be in a position to measure its strength with the ordinary British naval forces in home waters (then consisting only of the small and inefficiently manned Channel squadron); but it should not be forgotten that the question of numbers is far less important at sea than on land. Numerical inferiority can be compensated by efficiency, by excellence of material, by the capacity and discipline of the men. Careful preparation permitting rapid mobilization can ensure a momentary superiority."