1912 To 1914, Third Novelle
Spending on the navy increased inexorably year by year. In 1909 Chancellor Bernhard von Bülow and Treasury Secretary Reinhold von Sydow attempted to pass a new budget boosting taxes in an attempt to reduce the deficit. The Social Democratic parties refused to accept the increased taxes on goods, while the conservatives opposed increases in inheritance taxes. Bülow and Sydow resigned in defeat and Theobald von Bethmann-Hollweg became Chancellor. His attempted solution was to initiate negotiations with Britain for an agreed slow down in naval building. Negotiations came to nothing when in 1911 the Agadir Crisis brought France and Germany into conflict. Germany attempted to 'persuade' France to cede territory in the Middle Congo in return for giving France a free hand in Morocco. The effect was to raise concerns in Britain over Germany's expansionist aims, and encouraged Britain to form a closer relationship with France, including naval cooperation. Tirpitz saw this once again as an opportunity to press for naval expansion and the continuation of the four capital ships per year building rate into 1912. The January 1912 elections brought a Reichstag where the Social Democrats, opposed to military expansion, became the largest party.
The German army, mindful of the steadily increasing proportion of spending going to the navy, demanded an increase of 136,000 men to bring its size closer to that of France. In February 1912 the British war minister, Viscount Haldane, came to Berlin to discuss possible limits to naval expansion. Meanwhile in Britain, First Lord of the Admiralty Winston Churchill made a speech describing the German navy as a 'luxury', which was considered an insult when reported in Germany. The talks came to nothing, ending in recriminations over who had offered what. Bethmann-Hollweg argued for a guaranteed proportion of expenditure for the army, but failed when army officers refused to support him publicly. Tirpitz argued for six new capital ships, and got three, together with 15,000 additional sailors in a new combined military budget passed in April 1912. The new ships, together with the existing reserve flagship and four reserve battleships were to become one new squadron for the High Seas Fleet. In all the fleet would have five squadrons of eight battleships, twelve large cruisers and thirty small, plus additional cruisers for overseas duties. Tirpitz intended that with the rolling program of replacements, the existing coastal defence squadron of old ships would become a sixth fleet squadron, while the eight existing battle-cruisers would be joined by eight more as replacements for the large cruisers presently in the overseas squadrons. The plan envisaged a main fleet of 100,000 men, 49 battleships and 28 battle-cruisers by 1920. The Kaiser commented of the British, "... we have them up against the wall."
Although Tirpitz had succeeded in getting more ships, the proportion of military expenditure on the navy declined in 1912 and thereafter, from 35% in 1911 to 33% in 1912 and 25% in 1913. This reflected a change in attitude amongst military planners that a land war in Europe was increasingly likely, and a turning away from Tirpitz's scheme for worldwide expansion using the navy. In 1912 General von Moltke commented, "I consider war to be unavoidable, and the sooner the better." The Kaiser's younger brother, Admiral Prince Heinrich of Prussia, considered that the cost of the navy was now too great. In Britain, Churchill announced an intention to build two capital ships for every one constructed by Germany, and reorganised the fleet to move battleships from the Mediterranean to channel waters. A policy was introduced of promoting British naval officers by merit and ability rather than time served, which saw rapid promotions for Jellicoe and Beatty, both of whom had important roles in the forthcoming World War I. By 1913 the French and British had plans in place for joint naval action against Germany, and France moved its Atlantic fleet from Brest to Toulon, replacing British ships.
Britain also escalated the arms race by expanding the capabilities of its new battleships. The 1912 Queen Elizabeth-class of 32,000 tons would have 15 in (380 mm) guns and be completely oil fuelled, allowing a speed of 25 knots. For 1912–13 Germany concentrated on battle-cruisers, with three Derfflinger-class ships of 27,000 tons and 26–27 knots maximum speed, costing 56–59 million marks each. These had four turrets mounting two 30.5 cm guns arranged in two turrets either end, with the inner turret able to fire over the outer. SMS Derfflinger was the first German ship to have anti-aircraft guns fitted.
In 1913, Germany responded to the British challenge laying down two Bayern-class battleships. These did not enter service until after the Battle of Jutland, so failed to take part in any major naval action of the war. They had displacement of 28,600 tons, a crew of 1100 and a speed of 22 knots, costing 50 million marks. Guns were arranged in the same pattern as the preceding battle-cruisers, but were now increased to 38 cm (15 in) diameter. The ships had four 8.8 cm anti-aircraft and also sixteen 15 cm lighter guns, but was coal fuelled. It was considered that coal bunkers at the sides of the ship added to protection against penetrating shells, but Germany also did not have a reliable supply of fuel oil. Two more ships of the class were later laid down, but never completed.
Three light cruisers commenced construction in German yards in 1912–1913 ordered by the Russian Navy, costing around 9 million marks. The ships were seized at the outbreak of World War I becoming SMS Regensburg,SMS Pillau and SMS Elbing. Two larger cruisers, SMS Wiesbaden and SMS Frankfurt were also commenced and entered service in 1915. More torpedo boats were constructed, with gradually increasing sizes having reached 800 tons for the V-25 to V-30 craft constructed by AG Vulcan in Kiel before 1914. In 1912 Germany created a Mediterranean squadron consisting of the battle-cruiser Goeben and light cruiser Breslau.
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