Who was the emperor of Austria during the Seven Weeks War?

If Greater Germany was to prevail, the crown would necessarily have to go to Franz Joseph, who had no desire to cede it in the first place to anyone else. On the other hand, if the idea of a smaller Germany won out, the German crown could of course not possibly go the Emperor of Austria, but would naturally be offered to the head of the largest and most powerful German state outside of Austria—the King of Prussia. The contest between the two ideas, quickly developed into a contest between Austria and Prussia. After Prussia decisively won the Seven Weeks War, this question was solved; Austria lost no territories as long as they remained out of German affairs.

Franz Joseph I of Austria

Franz Joseph I or Francis Joseph I (Franz Joseph Karl; 18 August 1830 – 21 November 1916) was Emperor of Austria, King of Hungary, and monarch of many other states of the Austro-Hungarian Empire, from 2 December 1848 to his death. From 1 May 1850 to 24 August 1866 he was also President of the German Confederation. He was the longest-reigning Emperor of Austria and King of Hungary, as well as the third-longest-reigning monarch of any country in European history, after Louis XIV of France and Johann II of Liechtenstein.

In December 1848, Emperor Ferdinand abdicated the throne at Olomouc, as part of Minister President Felix zu Schwarzenberg's plan to end the Revolutions of 1848 in Hungary. This allowed Ferdinand's nephew Franz Joseph to accede to the throne. Largely considered to be a reactionary, Franz Joseph spent his early reign resisting constitutionalism in his domains. The Austrian Empire was forced to cede its influence over Tuscany and most of its claim to Lombardy–Venetia to the Kingdom of Piedmont-Sardinia, following the Second Italian War of Independence in 1859 and the Third Italian War of Independence in 1866. Although Franz Joseph ceded no territory to the Kingdom of Prussia after the Austrian defeat in the Austro-Prussian War, the Peace of Prague (23 August 1866) settled the German question in favour of Prussia, which prevented the Unification of Germany from occurring under the House of Habsburg.

Franz Joseph was troubled by nationalism during his entire reign. He concluded the Austro-Hungarian Compromise of 1867, which granted greater autonomy to Hungary and transformed the Austrian Empire into the Dual Monarchy of Austria-Hungary. He ruled peacefully for the next 45 years, but personally suffered the tragedies of the execution of his brother, the Emperor Maximilian of Mexico in 1867, the suicide of his only son and heir, Crown Prince Rudolf, in 1889, and the assassination of his wife, Empress Elisabeth, in 1898.

After the Austro-Prussian War, Austria-Hungary turned its attention to the Balkans, which was a hotspot of international tension because of conflicting interests with the Russian Empire. The Bosnian Crisis was a result of Franz Joseph's annexation of Bosnia and Herzegovina in 1908, which had been occupied by his troops since the Congress of Berlin (1878).

On 28 June 1914, the assassination of his nephew, Archduke Franz Ferdinand, in Sarajevo resulted in Austria-Hungary's declaration of war against the Kingdom of Serbia, which was Russia's ally. That activated a system of alliances which resulted in World War I.

Franz Joseph died on 21 November 1916, after ruling his domains for almost 68 years as one of the longest-reigning monarchs in modern history. He was succeeded by his grandnephew Charles.

Franz Joseph was born in the Schönbrunn Palace in Vienna (on the 65th death anniversary of Francis of Lorraine), the eldest son of Archduke Franz Karl (the younger son of Holy Roman Emperor Francis II), and his wife Princess Sophie of Bavaria. Because his uncle, from 1835 the Emperor Ferdinand, was weak-minded, and his father unambitious and retiring, the young Archduke "Franzl" was brought up by his mother as a future Emperor with emphasis on devotion, responsibility and diligence.

Franzl came to idolise his grandfather, "der Gute Kaiser Franz", who had died shortly before the former's fifth birthday, as the ideal monarch. At the age of thirteen, Franzl started a career as a colonel in the Austrian army. From that point onward, his fashion was dictated by army style and for the rest of his life he normally wore the uniform of a military officer. Franz Joseph was soon joined by three younger brothers: Archduke Ferdinand Maximilian (born 1832, the future Emperor Maximilian of Mexico); Archduke Karl Ludwig (born 1833, father of Archduke Franz Ferdinand of Austria), and Archduke Ludwig Viktor (born 1842), and a sister, Maria Anna (born 1835), who died at the age of four.

Following the resignation of the Chancellor Prince Metternich during the Revolutions of 1848, the young Archduke, who it was widely expected would soon succeed his uncle on the throne, was appointed Governor of Bohemia on 6 April, but never took up the post. Instead, Franz was sent to the front in Italy, joining Field Marshal Radetzky on campaign on 29 April, receiving his baptism of fire on 5 May at Santa Lucia.

By all accounts he handled his first military experience calmly and with dignity. Around the same time, the Imperial Family was fleeing revolutionary Vienna for the calmer setting of Innsbruck, in Tyrol. Soon, the Archduke was called back from Italy, joining the rest of his family at Innsbruck by mid-June. It was at Innsbruck at this time that Franz Joseph first met his cousin Elisabeth, his future bride, then a girl of ten, but apparently the meeting made little impression.

Following victory over the Italians at Custoza in late July, the court felt it safe to return to Vienna, and Franz Joseph travelled with them. But within a few months Vienna again appeared unsafe, and in September the court left once more, this time for Olomouc (Olmütz) in Moravia. By now, Prince Alfred I of Windisch-Grätz, an influential military commander in Bohemia, was determined to see the young Archduke soon put on the throne. It was thought that a new ruler would not be bound by the oaths to respect constitutional government to which Ferdinand had been forced to agree, and that it was necessary to find a young, energetic emperor to replace the kindly, but mentally unfit Ferdinand.

By the abdication of his uncle Ferdinand and the renunciation of his father, the mild-mannered Franz Karl, Franz Joseph succeeded as Emperor of Austria at Olomouc on 2 December. At this time he first became known by his second as well as his first Christian name. The name "Franz Joseph" was chosen to bring back memories of the new Emperor's great-granduncle, Emperor Joseph II, remembered as a modernising reformer.

Under the guidance of the new prime minister Prince Schwarzenberg the Third, the new emperor at first pursued a cautious course, granting a constitution in early 1849. At the same time, a military campaign was necessary against the Hungarians, who had rebelled against Habsburg central authority in the name of their ancient liberties. Franz Joseph was also almost immediately faced with a renewal of the fighting in Italy, with King Charles Albert of Sardinia taking advantage of setbacks in Hungary to resume the war in March 1849.

However, the military tide began to swiftly turn in favor of Franz Joseph and the Austrian whitecoats. Almost immediately, Charles Albert was decisively beaten by Radetzky at Novara and forced to sue for peace, as well as to renounce his throne. In Hungary, the situation was more severe and Austrian defeat seemed imminent. Sensing a need to secure his right to rule, Franz Joseph sought help from Russia, requesting the intervention of Tsar Nicholas I, in order "to prevent the Hungarian insurrection developing into a European calamity".

Russian troops entered Hungary in support of the Austrians and the revolution was crushed by late summer of 1849. With order now restored throughout his Empire, Franz Joseph felt free to renege on the constitutional concessions he had made, especially as the Austrian parliament meeting at Kremsier had behaved—in the young Emperor's eyes—abominably. The 1849 constitution was suspended, and a policy of absolutist centralism was established, guided by the Minister of the Interior, Alexander Bach.

The next few years saw the seeming recovery of Austria's position on the international scene following the near disasters of 1848–1849. Under Schwarzenberg's guidance, Austria was able to stymie Prussian scheming to create a new German Federation under Prussian leadership, excluding Austria. After Schwarzenberg's premature death in 1852, he could not be replaced by statesmen of equal stature, and the Emperor himself effectively took over as prime minister.

On 18 February 1853, Franz Joseph survived an assassination attempt by Hungarian nationalist János Libényi. The emperor was taking a stroll with one of his officers, Count Maximilian Karl Lamoral O'Donnell, on a city bastion, when Libényi approached him. He immediately struck the emperor from behind with a knife straight at the neck. Franz Joseph almost always wore a uniform, which had a high collar that almost completely enclosed the neck. The collars of uniforms at that time were made from very sturdy material, precisely to counter this kind of attack. Even though the Emperor was wounded and bleeding, the collar saved his life. Count O'Donnell struck Libényi down with his sabre.

O'Donnell, hitherto only a Count by virtue of his Irish nobility (as a descendant of the Irish noble dynasty O'Donnell of Tyrconnell), was made a Count of the Habsburg Empire ("Reichsgraf"). Another witness who happened to be nearby, the butcher Joseph Ettenreich, swiftly overpowered Libényi. For his deed he was later elevated to the nobility by the Emperor and became Joseph von Ettenreich. Libényi was subsequently put on trial and condemned to death for attempted regicide. He was executed on the Simmeringer Heide.

After this unsuccessful attack, the Emperor's brother Archduke Ferdinand Maximilian, later Emperor of Mexico, called upon Europe's royal families for donations to construct a new church on the site of the attack. The church was to be a votive offering for the survival of the Emperor. It is located on Ringstraße in the district of Alsergrund close to the University of Vienna, and is known as the Votivkirche.

The 1850s witnessed several failures of Austrian external policy: the Crimean War, the dissolution of its alliance with Russia, and defeat in the Second Italian War of Independence. The setbacks continued in the 1860s with defeat in the Austro-Prussian War of 1866, which resulted in the Austro-Hungarian Compromise of 1867.

Political difficulties in Austria mounted continuously through the late 19th century and into the 20th century. However, Franz Joseph remained immensely respected; the Emperor's patriarchal authority held the Empire together while the politicians squabbled among themselves.

Following the accession of Franz Joseph to the throne in 1848, the political representatives of the Kingdom of Bohemia hoped and insisted that account should be taken of their historical state rights in the upcoming constitution. The autonomous position of Bohemia within the Habsburg Monarchy was to be expressed by the coronation of the new ruler to the king of Bohemia in Prague (the last coronation took place in 1836).

His new government installed the system of neoabsolutism in Austrian internal affairs to make the Austrian Empire a unitary, centralised and bureaucratically administered state. When Franz Joseph returned to constitutional rule after the debacles in Italy at Magenta and Solferino and summoned the diets of his lands, the question of his coronation as king of Bohemia returned to the agenda, as it had not since 1848. On 14 April 1861, Emperor Franz Joseph received a delegation from the Bohemian Diet with the words (in Czech):

In contrast to his predecessor Emperor Ferdinand (who spent the rest of his life after his abdication in 1848 in Bohemia and especially in Prague), Franz Joseph was never crowned king of Bohemia. In 1861, the negotiations failed because of unsolved constitutional problems, and in 1866, a visit of the monarch to Prague following the defeat at Hradec Králové (Königgrätz) was also unsuccessful.
In 1867, the Austro-Hungarian Compromise and the introduction of the dual monarchy left the Czechs and their aristocracy without the recognition of Bohemian state rights for which they had hoped. Instead of celebrating a coronation in Prague, they had to witness the coronation in Budapest (8 June 1867). In Bohemia, opposition to dualism took the form of street demonstrations, resolutions from district representations, and even open air mass protest meetings. The Czechs were disillusioned. According to the Czech newspaper "Národní listy", the Czechs had not yet been compensated for their wartime losses and sufferings during the Austro-Prussian War, and had just seen their historic state rights tossed aside and their land subsumed into the "other" half of the Austro-Hungarian Monarchy, commonly called "Cisleithania".

The Czech hopes were revived again in 1870–1871. In an imperial rescript of 26 September 1870, Franz Joseph referred again to the prestige and glory of the Bohemian Crown and to his intention to carry out a coronation. Under Minister-President Karl Hohenwart in 1871, the government of Cisleithania negotiated a series of fundamental articles spelling out the relationship of the Bohemian Crown to the rest of the Habsburg Monarchy. On 12 September 1871, Franz Joseph announced:

For the planned coronation, the composer Bedřich Smetana had written the opera "Libuše", but the ceremony did not take place. The creation of the German Empire, domestic opposition from German-speaking liberals (especially German-Bohemians) and from Hungarians doomed the Fundamental Articles. Hohenwart resigned and nothing changed. Whenever Franz Joseph visited Bohemia, he was greeted as the uncrowned Bohemian king rather than as the emperor and the omnipresent decorations with depictions of the Crown of Saint Wenceslas reminded him of his unfulfilled promise of a coronation in Prague.

Many Czech people were waiting for political changes in monarchy, including Tomáš Garrigue Masaryk and others. Masaryk served in the "Reichsrat" (Imperial Council) from 1891 to 1893 in the Young Czech Party and again from 1907 to 1914 in the Realist Party (which he had founded in 1900), but he did not campaign for the independence of Czechs and Slovaks from Austria-Hungary. In Vienna in 1909 he helped Hinko Hinković's defense in the fabricated trial against prominent Croats and Serbs members of the Serbo-Croatian Coalition (such as Frano Supilo and Svetozar Pribićević), and others, who were sentenced to more than 150 years and a number of death penalties. The Czech question would remain unresolved for the entirety of Franz Joseph's political career.

The main foreign policy goal of Franz Joseph had been the unification of Germany under the House of Habsburg. This was justified on grounds of precedence; from 1452 to the end of the Holy Roman Empire in 1806, with only one period of interruption under the Wittelsbachs, the Habsburgs had generally held the German crown. However, Franz Joseph's desire to retain the non-German territories of the Habsburg Austrian Empire in the event of German unification proved problematic.

Two factions quickly developed: a party of German intellectuals favouring a Greater Germany ("Großdeutschland") under the House of Habsburg; the other favouring a Lesser Germany ("Kleindeutschland"). The Greater Germans favoured the inclusion of Austria in a new all-German state on the grounds that Austria had always been a part of Germanic empires, that it was the leading power of the German Confederation, and that it would be absurd to exclude eight million Austrian Germans from an all-German nation state. The champions of a lesser Germany argued against the inclusion of Austria on the grounds that it was a multi-nation state, not a German one, and that its inclusion would bring millions of non-Germans into the German nation state.

If Greater Germany was to prevail, the crown would necessarily have to go to Franz Joseph, who had no desire to cede it in the first place to anyone else. On the other hand, if the idea of a smaller Germany won out, the German crown could of course not possibly go the Emperor of Austria, but would naturally be offered to the head of the largest and most powerful German state outside of Austria—the King of Prussia. The contest between the two ideas, quickly developed into a contest between Austria and Prussia. After Prussia decisively won the Seven Weeks War, this question was solved; Austria lost no territories as long as they remained out of German affairs.

Franz Joseph's German identity was made explicitly clear during a meeting in August 1908 between himself and Edward VII when the latter tried to persuade him to abandon Austria-Hungary's alliance with Germany for co-operation with England; Franz Joseph replied that he was a "loyal ally" and said "I am a German prince."

In 1873, two years after the unification of Germany, Franz Joseph entered into the League of Three Emperors ("Dreikaiserbund") with Kaiser Wilhelm I of Germany and Tsar Alexander II of Russia, who was succeeded by Tsar Alexander III in 1881. The league had been designed by the German chancellor Otto von Bismarck, as an attempt to maintain the peace of Europe. It would last intermittently until 1887.

In 1903, Franz Joseph's veto of Cardinal Mariano Rampolla's election to the papacy was transmitted to the Papal conclave by Cardinal Jan Puzyna de Kosielsko. It was the last use of such a veto, as the new Pope Pius X prohibited future uses and provided for excommunication for any attempt.

During the mid-1870s a series of violent rebellions against Ottoman rule broke out in the Balkans, and the Turks responded with equally violent and oppressive reprisals. Tsar Alexander II of Russia, wanting to intervene against the Ottomans, sought and obtained an agreement with Austria-Hungary.

In the Budapest Conventions of 1877, the two powers agreed that Russia would annex Bessarabia, and Austria-Hungary would observe a benevolent neutrality toward Russia in the pending war with the Turks. As compensation for this support, Russia agreed to Austria-Hungary's annexation of Bosnia-Herzegovina. A scant 15 months later, the Russians imposed on the Ottomans the Treaty of San Stefano, which reneged on the Budapest accord and declared that Bosnia-Herzegovina would be jointly occupied by Russian and Austrian troops.

The treaty was overturned by the 1878 Treaty of Berlin, which allowed sole Austrian occupation of Bosnia-Herzegovina but did not specify a final disposition of the provinces. That omission was addressed in the Three Emperors' League agreement of 1881, when both Germany and Russia endorsed Austria's right to annex Bosnia-Herzegovina. However, by 1897, under a new tsar, the Russian Imperial government had again withdrawn its support for Austrian annexation of Bosnia-Herzegovina. The Russian foreign minister, Count Michael Muraviev, stated that an Austrian annexation of Bosnia-Herzegovina would raise "an extensive question requiring special scrutiny".

In 1908, the Russian foreign minister, Alexander Izvolsky, offered Russian support, for the third time, for the annexation of Bosnia and Herzegovina by Austria-Hungary, in exchange for Austrian support for the opening of the Bosporus Strait and the Dardanelles to Russian warships. Austria's foreign minister, Alois von Aehrenthal, pursued this offer vigorously, resulting in the quid pro quo understanding with Izvolsky, reached on 16 September 1908 at the Buchlau Conference. However, Izvolsky made this agreement with Aehrenthal without the knowledge of Tsar Nicholas II or his government in St. Petersburg, or any of the other foreign powers including Britain, France and Serbia.

Based upon the assurances of the Buchlau Conference and the treaties that preceded it, Franz Joseph signed the proclamation announcing the annexation of Bosnia-Herzegovina into the Empire on 6 October 1908. However a diplomatic crisis erupted, as both the Serbs and the Italians demanded compensation for the annexation, which the Austro-Hungarian government refused to entertain. The incident was not resolved until the revision of the Treaty of Berlin in April 1909, exacerbating tensions between Austria-Hungary and the Serbs.

On 28 June 1914 Franz Joseph's nephew and heir Archduke Franz Ferdinand, and his morganatic wife Sophie, Duchess of Hohenberg, were assassinated by Gavrilo Princip, a Yugoslav nationalist of Serbian ethnicity, during a visit to Sarajevo. When he heard the news of the assassination, Franz Joseph said that "one has not to defy the Almighty. In this manner a superior power has restored that order which I unfortunately was unable to maintain."

While the emperor was shaken, and interrupted his holiday to return to Vienna, he soon resumed his vacation at his imperial villa at Bad Ischl. Initial decision-making during the "July Crisis" fell to Count Leopold Berchtold, the Austrian foreign minister; Count Franz Conrad von Hötzendorf, the chief of staff for the Austro-Hungarian army and the other ministers. The ultimate resolution of deliberations by the Austrian government during the weeks following the assassination of the Archduke was to give Serbia an ultimatum of itemized demands with which it was virtually certain Serbia would be unable or unwilling to comply, thus serving as a "legal basis for war."

However, the general movement toward war with Serbia was already in motion prior to assassination of the Archduke as evidenced by a 14 June memo of Berchtold recommending the "elimination of Serbia" as a state, which Franz Josef expressed agreement with in a letter delivered to Kaiser Wilhelm II in Berlin on 5 July. In that letter, Franz Josef "...explicitly stated that the decision for war against Serbia had been made before the assassination of the Archduke, and that the events of Sarajevo only confirmed the already pre-existing need for a war."

A week after delivery of the Austrian ultimatum to Serbia, on 28 July, Austria-Hungary declared war on Serbia. Within weeks, the Germans, Russians, French and British had all entered the fray which eventually became known as World War I. On 6 August, Franz Joseph signed the declaration of war against Russia.

Franz Joseph died in the Schönbrunn Palace on the evening of 21 November 1916, at the age of 86. His death was a result of developing pneumonia of the right lung several days after catching a cold while walking in Schönbrunn Park with the King of Bavaria. He was succeeded by his grandnephew Charles I, who reigned until the collapse of the Empire following its defeat in 1918.

He is buried in the Imperial Crypt in Vienna, where flowers are still left by monarchists.

It was generally felt in the court that the Emperor should marry and produce heirs as soon as possible. Various potential brides were considered: Princess Elisabeth of Modena, Princess Anna of Prussia and Princess Sidonia of Saxony. Although in public life Franz Joseph was the unquestioned director of affairs, in his private life his formidable mother still wielded crucial influence. Sophie wanted to strengthen the relationship between the Houses of Habsburg and Wittelsbach—descending from the latter house herself—and hoped to match Franz Joseph with her sister Ludovika's eldest daughter, Helene ("Néné"), who was four years the Emperor's junior.

However, Franz Joseph fell deeply in love with Néné's younger sister Elisabeth ("Sisi"), a beautiful girl of fifteen, and insisted on marrying her instead. Sophie acquiesced, despite her misgivings about Sisi's appropriateness as an imperial consort, and the young couple were married on 24 April 1854 in St. Augustine's Church, Vienna.

Their marriage would prove to be an unhappy one; though Franz Joseph was passionately in love with his wife, the feeling was not mutual and Sisi never truly acclimatised to life at court, and was frequently in conflict with the imperial family. Their first daughter Sophie died as an infant, and their only son Rudolf died by suicide in 1889 in the infamous Mayerling Incident.

In 1885 Franz Joseph met Katharina Schratt, a leading actress of the Vienna stage, and she became his friend and confidante. This relationship lasted the rest of his life, and was—to a certain degree—tolerated by Sisi. Franz Joseph built Villa Schratt in Bad Ischl for her, and also provided her with a small palace in Vienna. Though their relationship lasted for thirty-four years, it remained platonic.

The Empress was an inveterate traveller, horsewoman, and fashion "maven" who was rarely seen in Vienna. Sisi was obsessed about preserving her beauty, carrying out many bizarre routines and strenuous exercise, and as a result suffered from ill health. She was stabbed to death by an Italian anarchist in 1898 while on a visit to Geneva. A few days after the funeral, Robert of Parma wrote in a letter to his friend Tirso de Olazábal that "It was pitiful to look at the Emperor, he showed a great deal of energy in his immense pain, but at times one could see all the immensity of his grief." Franz Joseph never fully recovered from the loss. According to the future empress Zita of Bourbon-Parma he told his relatives: "You'll never know how important she was to me" or, according to some sources, "You will never know how much I loved this woman."

Archduke Franz Ferdinand became heir presumptive ("Thronfolger") to the throne of Austria-Hungary in 1896, after the deaths of his cousin Rudolf (in 1889) and his father Karl Ludwig. The relationship between him and Franz Joseph had always been a fairly contentious one, which was further exacerbated when Franz Ferdinand announced his desire to marry Countess Sophie Chotek, a match that was out of the question in the mind of the emperor, as Sophie was merely of nobility as opposed to being of dynastic rank.

Although the emperor received letters from members of the imperial family throughout the fall and winter of 1899 importuning him to relent, Franz Joseph stood his ground. He finally gave his consent in 1900; however, the marriage was to be morganatic and any children of the marriage would be ineligible to succeed to the throne. The couple were married on 1 July 1900 at Reichstadt. The emperor did not attend the wedding, nor did any of the archdukes. After that, the two men disliked and distrusted each other.

Following the assassination of Franz Ferdinand and Sophie in 1914, Franz Joseph's daughter, Marie Valerie, noted that her father expressed his greater confidence in the new heir presumptive: his grandnephew Archduke Charles. The emperor admitted to his daughter, regarding the assassination: "For me, it is a relief from a great worry."Franz Joseph's names in the languages of his empire were:His official grand title after the "Ausgleich" of 1867 was: "Francis Joseph the First, by the Grace of God Emperor of Austria, Apostolic King of Hungary, King of Bohemia, King of Dalmatia, Croatia, Slavonia, Galicia and Lodomeria and Illyria; King of Jerusalem etc., Archduke of Austria; Grand Duke of Tuscany and Cracow, Duke of Lorraine, of Salzburg, Styria, Carinthia, Carniola and of Bukovina; Grand Prince of Transylvania; Margrave of Moravia; Duke of Upper and Lower Silesia, of Modena, Parma, Piacenza and Guastalla, of Oświęcim, Zator and Ćeszyn, Friuli, Ragusa (Dubrovnik) and Zara (Zadar); Princely Count of Habsburg and Tyrol, of Kyburg, Gorizia and Gradisca; Prince of Trent (Trento) and Brixen; Margrave of Upper and Lower Lusatia and in Istria; Count of Hohenems, Feldkirch, Bregenz, Sonnenberg, etc.; Lord of Trieste, of Cattaro (Kotor), and over the Windic march; Grand Voivode of the Voivodship of Serbia."In addition, he founded the Order of Franz Joseph ("Franz Joseph-Orden") in 1849, and the Order of Elizabeth ("Elizabeth-Orden") in 1898.Franz Josef Land in the Russian Arctic was named in his honour in 1873 by the Austro-Hungarian North Pole expedition which first reported finding it. The Franz Josef Glacier in New Zealand's South Island also bears his name.

Franz Joseph founded in 1872 the "Franz Joseph University" (Hungarian: "Ferenc József Tudományegyetem", Romanian: "Universitatea Francisc Iosif") in the city of Cluj-Napoca (at that time a part of Austria-Hungary under the name of Kolozsvár). The university was moved to Szeged after Cluj became a part of Romania, becoming the University of Szeged.

In certain areas, celebrations are still being held in remembrance of Franz Joseph's birthday. The Mitteleuropean People's Festival takes place every year around 18 August, and is a "spontaneous, traditional and brotherly meeting among peoples of the Central-European Countries". The event includes ceremonies, meetings, music, songs, dances, wine and food tasting, and traditional costumes and folklore from Mitteleuropa.

In the years after Ferdinand Max's departure from Austria, the Imperial Austrian Navy suffered under further political and budgetary constraints. In April 1864, it was proposed that the naval ministry, which the former Archduke had helped to establish, be disbanded. In January 1865, Emperor Franz Joseph I dissolved the ministry and the Imperial Austrian Navy was again placed under the jurisdiction of the Austrian Ministry of War. Under the 1865 budget, just 7,100,000 Florins were allocated towards naval expenses, but once more, none of the funds were designated for warship construction. In 1866, the naval budget grew slightly to 7,800,000 Florins, but for the third consecutive year there would be no funds for additional ironclads, or other warships. Thus, when the Seven Weeks War began in June 1866, the Imperial Austrian Navy would possess only ships which had been constructed during Ferdinand Max's tenure as "Oberkommandant der Marine".

Austro-Italian ironclad arms race

A naval arms race between the Austrian Empire and Italy began in the 1860s when both ordered a series of ironclad warships, steam-propelled vessels protected by iron or steel armor plates and far more powerful than all-wood ships of the line. These ships were constructed to establish control over the Adriatic Sea in the event of a conflict between the two countries.

The unification of much of Italy in this time period resulted in the amalgamation of the various navies of the former Italian states into the "Regia Marina" (Royal Navy). The Sardinian component included two ironclads, ordered from France in 1860, which became Italy's first broadside ironclads. The country quickly began a substantial construction program to bolster the "Regia Marina", as the Italians believed that a strong navy would play a crucial role in making the recently unified kingdom a great power.

These actions captured the attention of the Austrian Empire, which viewed Italy with great suspicion and worry, as irredentist claims by Italian nationalists were directed at key Austrian territories such as Venice, Trentino, and Trieste. In response to the growing strength of Sardinia—soon to be Italy—the Imperial Austrian Navy ordered two ironclads in 1860. This began a naval arms race between Austria and Italy, centered around the construction and acquisition of ironclads. This continued for the next six years, and by the time the war broke out between the two in 1866, Austria possessed seven ironclads to Italy's twelve.

While Italy emerged on the winning side of the war and acquired the Kingdom of Lombardy–Venetia under the terms of the Treaty of Vienna, the "Regia Marina" was decisively defeated at the Battle of Lissa by the much smaller Imperial Austrian Navy. Their poor performance led to a period of neglect with reduced naval budgets and a halt to new ship construction; Italy would not have another ironclad laid down until 1873.

Meanwhile, Austria reformed itself into the Austro-Hungarian Empire in 1867 after losing the Seven Weeks War to Prussia. In the years following the Battle of Lissa, Wilhelm von Tegetthoff would oversee the construction of three additional ironclads and the rebuilding of a fourth. After Tegetthoff's death in 1871, the Austro-Hungarian Navy entered its own period of neglect, with just five additional ironclads being constructed in the ensuing thirteen years. Both navies engaged in further construction projects throughout the 1870s and early 1880s, but the arms race ended in the 1880s due the signing of the Triple Alliance between Italy, Austria-Hungary, and Germany in 1882 and the introduction of new technologies that led to the development of pre-dreadnought battleships. Despite their alliance, however, Italy and Austria-Hungary would engage in a second naval arms race centered around the construction of battleships at the turn of the century. This arms race would continue until the beginning of World War I.

The creation of the Kingdom of Italy and a unified Italian navy was the result of concerted efforts of Italian nationalists and monarchists loyal to the House of Savoy to establish a united kingdom encompassing the whole of the Italian Peninsula. This process began in earnest during the Revolutions of 1848. After a successful revolution in France in February 1848 toppled King Louis Philippe I and established the Second French Republic, revolutionary fervor broke out across Europe. In Vienna, Austrian Chancellor Klemens von Metternich resigned his post and left in exile for London while Austrian Emperor Ferdinand I was forced to abdicate the throne in favor of his nephew, Franz Joseph I. Across the Austrian Empire, nationalist sentiments among Austria's various ethnic groups led to the revolutions in Austria to take several different forms. Liberal sentiments prevailed extensively among the German Austrians, which were further complicated by the simultaneous events in the German states. The Hungarians within the Empire largely sought to establish their own independent kingdom or republic, which led to a revolution in Hungary. Italians within the Austrian Empire likewise sought to unify with the other Italian-speaking states of the Italian Peninsula to form a "Kingdom of Italy".

Within the Kingdom of Lombardy-Venetia, the revolution in Vienna sparked anti-Habsburg riots in the cities of Milan and Venice. Austrian Field Marshal Joseph Radetzky was unable to defeat the Venetian and Milanese insurgents in Lombardy-Venetia, and had to order his forces to evacuate western Italy, pulling his troops back to a chain of defensive fortresses between Milan and Venice known as the Quadrilatero. With Vienna itself in the middle of an uprising against the Habsburg Monarchy, the Austrian Empire appeared on the brink of collapse. On 23 March 1848, just one day after Radetzky was forced to retreat from Milan, The Kingdom of Sardinia sought to capitalize on the chaos engulfing the Austrian Empire and declared war, sparking the First Italian War of Independence.

After nearly driving Austrian forces out of the Italian peninsula altogether, fortunes turned for the Kingdom of Sardinia. The Papal States and the Kingdom of the Two Sicilies, who had initially allied with Sardinia against Austria, pulled out of the war, having barely participated in the fighting at all. Austrian reinforcements also bolstered Radetzky's forces in the Italian peninsula and following the Battle of Custoza, the tide of the war turned turned in Austria's favor. This victory was followed up by Sardinia's decisive defeat at the Battle of Novara in March 1849, which was followed by King Charles Albert of Sardinia abdicating the throne of Sardinia in favor of his son Victor Emmanuel II. The ensuing peace in August 1849 ended the war in an Austrian victory.

After the failure of the First Italian War of Independence, Sardinia began the search for potential allies. Sardinian Prime Minister Camillo Benso, Count of Cavour, found French Emperor Napoleon III supportive of an alliance with Sardinia following the Crimean War, in which France and Sardinia were allies against Russia. After the Plombières Agreement of 1858, Napoleon III and Cavour signed a secret treaty of alliance against Austria whereby France would assist Sardinia in return for Nice and Savoy being ceded to France. The Franco-Sardinian forces quickly defeated the Austrians during the spring of 1859 and after the Battle of Solferino, Austria ceded most of Lombardy and the city of Milan to France under the Treaty of Zürich, who transferred it to Sardinia in exchange for Savoy and Nice. During the war, Italian revolutionary Giuseppe Garibaldi would emerge as a leader for the unification of Italy. Garibaldi, initially supported a republican revolution to bring the peninsula together. However, he eventually concluded that only the Kingdom of Sardinia could unify the Italian states into one nation.

In 1860, uprisings in Messina and Palermo in the Kingdom of the Two Sicilies provided Garibaldi with an opportunity to begin the conquest of Southern Italy. He gathered about a thousand volunteers – called "i Mille" (the Thousand), or, as popularly known, the Redshirts – in two ships named "Il Piemonte" and "Il Lombardo", and left from Genoa on 5 May. On 11 May, Garibaldi and his forces landed at Marsala, on the westernmost point of Sicily. Garibaldi rapidly gained control of the island, declaring himself dictator of Sicily in the name of Victor Emmanuel II of Italy on 14 May.

After victories at Calatafimi, Palermo, and Milazzo, nearly the entire island was under Garibaldi's control by the end of July. On 19 August, his men disembarked in Calabria in anticipation of an offensive aimed at capturing Naples, capital of the Kingdom of the Two Sicilies. Troops from the Kingdom of the Two Sicilies defending Calabria offered little resistance, as several units of the Bourbon army disbanded or even joined Garibaldi's ranks. On 30 August a Sicilian army was officially disbanded at Soveria Mannelli, while only minor and dispersed units continued the fight. The Neapolitan fleet behaved in a similar way and offered little to no resistance against Garibaldi's forces. King Francis II of the Two Sicilies was thus forced to abandon Naples and entrench himself in the fortress of Gaeta, while a last stand was set up on the Volturno river, north of Naples. On 7 September, Garibaldi entered Naples and was hailed as a liberator by the city.

While Garibaldi conquered Southern Italy, the Kingdom of Sardinia invaded the Papal States, conquering most of Central Italy after the Battle of Castelfidardo. Sardinian troops then entered the Kingdom of Two Sicilies from the north and joined Garibaldi's forces. After the Battle of the Volturnus, the only organized Bourbon force left in Italy remained at Gaeta. On 21 October, a plebiscite confirmed the annexation of the Kingdom of the Two Sicilies to the Kingdom of Sardinia by an overwhelming majority, while on 26 October, Victor Emmanuel II and Garibaldi met at Teano in northern Campania, where Garibaldi shook Victor Emmanuel's hand and hailed him as "King of Italy". The last Bourbon stronghold at Gaeta finally surrendered after a long siege in February 1861. With the capture of Gaeta, a unified Kingdom of Italy was proclaimed on 17 March 1861. King Victor Emmanuel II of Savoy was then declared King Victor Emmanuel II of Italy.

In March 1860, Cavour became the Kingdom of Sardinia's naval minister. He assumed this role at a time when Sardinia was rapidly expanding into Northern and Central Italy. Earlier that month, plebiscites in Tuscany, Modena and Reggio, Parma, and Romagna produced overwhelming majorities in favor of annexation by Sardinia. This expansion of Sardinia likewise resulted in the growth of the kingdom's navy. In April, Cavour oversaw the incorporation of Tuscany's small fleet into the Sardinian Navy. Immediately after the Tuscan fleet had been integrated into the Sardinian Navy, Cavour placed an order with the Société Nouvelle des Forges et Chantiers de la Méditerranée to construct two armored warships in Toulon. These two ships would become the "Formidabile" class, the first ironclads to serve in the Italian Peninsula. While foreign powers such as Austria watched the growth of Sardinia and the expansion of its army closely, the consolidation of the Sardinian Navy after the incorporation of multiple states across the Italian Peninsula received far less attention. This allowed Cavour to continue his work incorporating the various fleets Sardinia inherited as more and more Italian states joined the growing kingdom.

Garibaldi's conquest of the Kingdom of Two Sicilies marked the beginning of the Sardinian Navy's transformation into the Italian Regia Marina. When the Italian revolutionary landed in Sicily in May 1860, only two steamships were at the disposal of his thousand volunteers. By the time Garibaldi had conquered the island, he had in his possession over 12 steam ships of various types which would later assist in transporting his army across the Strait of Messina to Southern Italy. These numbers were bolstered by the desertion of most of the Neapolitan Navy in July 1860 to Garibaldi's cause. Following Garibaldi's conquest of Naples in September, the remainder of the Neapolitan Navy was handed over to Carlo Pellion di Persano for incorporation into the Sardinia Navy.

The rest of Southern Italy fell in short order and in March 1861, the Kingdom of Italy was proclaimed. By this time, the vast majority of the former navies of the various Italian states had been brought into the Sardinian Navy. Two weeks after the establishment of the Kingdom of Italy, the Italian Regia Marina was created as a single unified naval force for the newly formed kingdom. Cavour immediately asked the Italian Chamber of Deputies for an unprecedented 20,000,000-lire budget to expand the Regia Marina beyond its newly acquired ships. The funds would also be used to construct additional ironclads as well as establish an Italian naval base at Ancona on the Adriatic Sea. The stage was thus set for the Italian ironclad program.

Even before the unification of Italy, the Imperial Austrian Navy had been undergoing its own expansion ever since the promotion of Archduke Ferdinand Maximilian of Austria (the future Emperor Maximilian I of Mexico) to the office of "Kontreadmiral" (Rear Admiral) and to the post of "Oberkommandant der Marine" (Commander-in-Chief of the Navy) in September 1854. At the age of 22, Ferdinand Max became the youngest "Oberkommandant" in the history of the Imperial Austrian Navy, being a year younger than when Archduke Friedrich of Austria assumed command of the navy ten years earlier. Despite his age and his lack of experience in battle or command on the high seas, Ferdinand Max was described by naval historian Lawrence Sondhaus as "the most gifted leader the navy had ever had, or ever would have." Ferdinand Max worked hard to separate the Imperial Austrian Navy from its dependence upon the Imperial Austrian Army, which had nominal control over its affairs. As the younger brother to Franz Joseph I, Ferdinand Max was given great freedom by the Emperor to manage the navy as he saw fit, especially with respect to the construction and acquisition of new warships.

Ferdinand Max immediately went to work expanding the Imperial Austrian Navy. Fears of over-dependence upon foreign shipyards to supply Austrian warships enabled him to convince his brother to authorize the construction of a new drydock at Pola, and the expansion of existing shipyards in Trieste. Furthermore, Ferdinand Max initiated an ambitious construction program in the ports of Pola, Trieste, and Venice, the largest the Adriatic had seen since the Napoleonic Wars. By 1855, a screw-powered ship-of-the-line was under construction in Pola after failed bids to construct the ship with British and American shipbuilding firms, while two screw-frigates and two screw-corvettes were being built in Trieste and Venice respectively.

By the spring of 1855, the Imperial Austrian Navy consisted of four frigates, four corvettes, and two paddle steamers in active service in the Mediterranean Sea. This would be the largest Austrian fleet since before the War of Austrian Succession over 100 years prior. Despite these efforts however, the Imperial Austrian Navy was still considerably smaller than its French, British, or Sardinian counterparts. Indeed, the Imperial Austrian Navy was still attempting to catch up to the technological developments which had emerged during the first half of the 19th century with respect to steam power, when the emergence of the French iron-plated floating battery "Dévastation" gained international attention following its use during the Crimean War in October 1855. "Dévastation" would signal the beginning of the emergence of ironclad warships over the course of the next decade.

Following Austria's defeat during the Second War of Italian Independence, Ferdinand Max proposed an even larger naval construction program than the one he had initiated upon his appointment as "Oberkommandant der Marine". This fleet would be large enough not only to show the Austrian flag around the world, but also to protect its merchant marine as well as thwart any Adriatic ambitions from the growing Kingdom of Sardinia. However, constitutional reforms in Austria after the military defeat earlier that summer, as well as the recent introduction of ironclads into the navies of the world, would make the proposal more expensive than he had initially intended. While the Archduke had previously been given free rein over naval affairs, and had enjoyed an unprecedented allocation of new funds to complete his various expansion and modernization projects, Austria's financial difficulties in the immediate aftermath of the war stalled his plans for the time being. Despite these obstacles, the initiation of the Italian ironclad program between 1860 and 1861, coupled with Austrian fears of an Italian invasion or seaborne landing directed against Venice, Trieste, Istria, and the Dalmatian Coast, necessitated an Austrian naval response to counter the growing strength of the Regia Marina.

Austria's defeat in the Second War of Italian Independence in 1859 marked the end of the Italian Peninsula being divided up among several independent states. As the Kingdom of Sardinia swiftly annexed the United Provinces of Central Italy in early 1860, the rapid growth of Sardinia's territory and armed forces quickly earned the attention of the Austrian government in Vienna. While Austrian Emperor Franz Joseph I ordered Austria's army to mobilize in anticipation of a potential Sardinian attack directed at Venice, little focus was given to the similar growth of the Sardinian Navy as it inherited the fleets of several Italian states.

When Garibaldi's conquest of the Kingdom of the Two Sicilies began in May 1860, the Austrian Empire responded by recalling its small fleet stationed in the Levant under the command of "Fregattenkapitän" (Captain) Wilhelm von Tegetthoff. "Kontreadmiral" (Rear Admiral) Bernhard von Wüllerstorf-Urbair then deployed the Imperial Austrian Navy to the waters off of Naples in order to prevent Garibaldi from attacking the city by sea. However, the defection of the Neapolitan Navy and Garibaldi's rapid advance up the Italian Peninsula after making landfall at Calabria rendered this fleet useless. The Austrian fleet was instead tasked with transporting King Francis II from Naples to Gaeta.

Sardinia's annexation of most of Central Italy in early 1860 had caused concern for the Austrian Empire, but the collapse of the Kingdom of the Two Sicilies in just a matter of months sparked a diplomatic and military crisis in Vienna. While Garibaldi finished his conquests, the Sardinian Army invaded the Papal States and the growing Sardinian Navy entered the Adriatic to blockade the port of Ancona. The Austrian Empire viewed Sardinian warships in the Adriatic as an overtly hostile act, and fears of Garibaldi continuing his military campaigns by attempting a landing in Istria or the Dalmatian Coast resulted in even greater alarm. The Austrian government knew these lands were deemed "Italia irredenta" (Unredeemed Italy) by revolutionaries such as Garibaldi, due to their historical ties with the former Venetian Republic. To make matters worse, Garibaldi had several hundred Hungarian volunteers in the ranks of his army. Vienna calculated that should a landing along the Austrian coastline by Garibaldi be successful, the whole southern and eastern portions of the country could potentially erupt into revolution, much like the revolutions in 1848 which nearly toppled the Austrian Empire altogether.

These concerns were so great that in September 1860, Emperor Franz Joseph I issued an order to the Imperial Austrian Navy which stipulated that all Sardinian ships of any kind were to be barred entry into any Austrian-controlled port. Franz Joseph also ordered that any vessel identified as carrying Garibaldi or his men were to be "treated as pirates, regardless of their flag". While tensions eased slightly following the Sardinian Navy's withdrawal from Ancona in October after the city fell to Sardinian troops on land, Austrian fears of a potential naval invasion continued. The Austrian Empire refused to recognize the territorial changes since the Treaty of Zürich, but support from the other European powers proved to be insufficient to prevent the unification of Italy. France and the United Kingdom were locked in their own naval arms race at the time, which meant the only support the British were able to provide were firm commitments against an Italian attack on Istria or Dalmatia. This was sufficient to prevent the Sardinian government from sanctioning any expeditions directed at the two regions, and fears within Vienna of an Italian naval invasion evaporated by 1861. Nevertheless, the Austrian Empire refused to recognize the proclamation of the Kingdom of Italy on 17 March 1861, nor King Victor Emmanuel II's claim to be the "King of Italy", which had been left vacant since Napoleon I's abdication of the title in 1814.

The Italian ironclad program began before there even was a "Kingdom of Italy". The first two ironclad warships in the Italian Peninsula, the "Formidabile"-class ironclads and, were ordered by Cavour in the spring of 1860, before Garibaldi had even landed in Sicily. The ships had originally been intended to serve as armored floating batteries, and their designs were thus based on the France's which had earned recognition at the Battle of Kinburn during the Crimean War. Despite these plans, the rapid expansion of the Kingdom of Sardinia and the subsequent unification of Italy resulted in the ships being converted into sea-going broadside ironclads. This change signaled the direction of Italian foreign and naval policy in the years immediately after the formation of the Kingdom of Italy, as the ships were aimed at defeating the Imperial Austrian Navy in open combat. Indeed, even after the unification of Italy and the establishment of a single Kingdom of Italy in 1861, many Italians believed the "Risorgimento" had not yet been complete, as the Austrian Empire still possessed several Italian-speaking territories, most notably Venice.

"Terribile" would be the first Italian ironclad to be commissioned into the Regia Marina, joining the fleet in September 1861. She was soon followed by her sister ship "Formidabile", which was commissioned in May 1862, the same month that Austria's first ironclad, "Salamander", would be commissioned into the Imperial Austrian Navy.

While Austria continued to refuse to grant diplomatic recognition of the newly formed Kingdom of Italy, it could not continue to ignore the threat the Regia Marina's own naval expansion program, under the direction of Cavour, posed to the Austrian coastline. In response to the assembly of the Italian "Formidabile" class, Archduke Ferdinand Max personally ordered the construction of the "Drache"-class ironclads at the end of 1860. These ships, constructed by a Trieste-based shipbuilding firm, would be the first ironclad warships of the Imperial Austrian Navy. Austria had considered constructing ironclads before the "Drache" class, but the expensive cost of British shipbuilding offers in December 1858 led to the offers being rejected by "Kontreadmiral" (Rear Admiral) Ludwig von Fautz. However, the emergence of Italy's own ironclad program led to these concerns being rendered irrelevant in the face of the threat the Regia Marina posed.

The financial, logistical, and political hurdles Ferdinand Max had to overcome in order to construct the "Drache" class were enormous. Austria had recently lost Eugène Sandfort, the French-born shipbuilding director for the Imperial Austrian Navy, who had resigned his post during the Second War of Italian Independence. Usually, the Austrian Navy would simply place an order for the vessels with a foreign shipyard, but the falling value of the Austrian Florin in the years immediately after the war meant that Ferdinand Max could not follow Cavour's lead and seek to construct the ships he needed in another country. Ferdinand Max was thus forced to construct Austria's first ironclads using resources the Austrian Empire had on hand. While this project would no doubt be challenging, as Austria had never possessed any ironclad warships in the past, much less constructed one from scratch, the Archduke did have a few tools at his disposal for such an ambitious undertaking. The Navale Adriatico shipyard in Trieste was owned by the Austrian government at the time, while additional yards in the Austrian Littoral both had experience building engines which would be large enough to theoretically power the ironclads Ferdinand Max wished to construct. Inner Austria likewise possessed iron ore mines and ironworks necessary to make the armor for the warships. Furthermore, the Imperial Austrian Navy could also count on its own group of engineers to design the ships, as Ferdinand Max had dispatched a group of naval cadets, led by Josef von Romako, to study naval architecture in Copenhagen shortly before the war.

Ferdinand Max ordered the ships and their engines in December 1860 from domestic shipyards. This work was done before any formal approval for the project could be granted by Franz Joseph I, but in February 1861 the Emperor allowed the construction to proceed. Ten says later, the Emperor also privatized the Navale Adriatico shipyard, in order to increase private sector interest in Austria's emerging ironclad program.

Securing the armor contracts for the ships would be more difficult. Ferdinand Max had placed an order for the armor with domestic ironworks, but the sheer quantity of iron required for the ships, and the timescale involved with the construction project, was beyond the industry's capacity. As a result, the Archduke was forced to look to France for the iron plating his new warships would require. His overtures to French firms had to be kept secret however due to a ban on armor exports issued by French Emperor Napoleon III, who wished to preserve French resources for France's own ironclad projects. The money to pay for the French-built armor which would be used on the "Drache"-class ships were therefore supplied via Austrian agents operating out of Geneva. After being sent to Marseilles for shipping, the armor was placed aboard merchant ships flying the flags of neither France or Austria. The entire operation was kept so secret that not even the captains of the ships carrying the plates knew where they would be delivering their cargo until just before they set sail. Despite the level of secrecy employed, French officials discovered the operation shortly before the first vessel, the Mecklenburg merchant ship "Grossfürstin Katharina", was to set sail from Marseilles. They seized the ship and confiscated its cargo, initially believing the vessel was smuggling arms to Garibaldi's forces in Italy. After the Austrian government used diplomatic backchannels to negotiate with French authorities, the cargo was released and the ships were allowed to leave Marseilles without any further incidents.

When the first "Drache"-class ironclad, "Salamander", was commissioned into the Imperial Austrian Navy in May 1862, she was the most expensive warship ever constructed for the Imperial Austrian Navy. She and her sister ship "Drache" cost 2,300,000 Florins each, a staggering amount of money at the time, and over six times the cost of previous Austrian warships. Despite the expensive nature of the ships involved, and before either the Austrians or Italians had commissioned a single ship into their respective navies, plans were already being made in both countries to develop more ironclad warships, each to counter the naval strength of the other.

With the commissioning of the Austrian "Drache"-class ironclads, both the Austrian Empire and the Kingdom of Italy possessed at least one ironclad warship, with more on the way. Over the next five years, the ironclad arms race between the two countries would only grow, as each country worked to gain a naval advantage over the other. While the "Drache"-class ships were still under construction in Trieste, Ferdinand Max began work in securing the necessary funding to continue Austria's ironclad program.

In April 1861, the Archduke drew up his first plans for a modernized and armored Imperial Austrian Navy. In his submission to Emperor Franz Joseph I, he argued that nearly all of Austria's diplomatic and military challenges could be addressed by engaging in a large ironclad construction program. His proposal outlined a battle fleet of nine armored ironclads, with seven more warships to join the two "Drache"-class ships in the autumn of 1863. Ferdinand Max wrote that the recent technological revolution in naval affairs which had been caused by the emergence of ironclads provided for a clean slate in which the Imperial Austrian Navy could develop newer warships on the same scale and pace as the other Great Powers of Europe, as older wooden ships of any type or nationality had been rendered obsolete by the new armor-plated ships.

Ferdinand Max was also sure to include the diplomatic benefits of engaging in an ambitious ironclad construction program. He argued that constructing a further seven ironclads by 1863 would allow the Imperial Austrian Navy to possess a fleet one-third the size of the French Navy, considered one of the largest and strongest in the world. This new fleet would thus increase the value of any military alliance Austria were to make with the other European powers, and potentially end the diplomatic isolation that the Empire had been facing since the Crimean War. Furthermore, the need for Austria to construct these warships was urgent in the eyes of Ferdinand Max, as the Italian government was devoting substantial amounts of money to building ironclads for the Regia Marina.

While Ferdinand Max was laying out plans for Austria's ironclad program, the Regia Marina was already executing its own program. Following up on the construction of the "Formidabile" class with another order for more warships, Cavour met with New York shipbuilder William H. Webb in Turin in late 1860, and concluded a deal was made for his shipyard to construct two armored frigates, which would eventually become the ironclads and. Cavour's agreement with Webb was made a state secret, and it would not be until after his death in June 1861 that the contracts for the ships were signed by General Luigi Menabrea, who succeeded Cavour as head of the Regia Marina. "Re d'Italia" was the first ship of the class to be laid down in New York City in November 1861 and her sister ship "Re di Portogallo" followed in December.

News of the Italian project, which became public in August 1861, sparked panic in Vienna. Just four months earlier, the Austrian Reichsrat had rejected Ferdinand Max's naval expansion program, only allocating the Archduke 6,000,000 Florins to run the Imperial Austrian Navy in 1862. The following month, Ferdinand Max briefed the Austrian Council of Ministers in Vienna on the Italian naval expansion. He told the council the Imperial Austrian Navy needed a budget of 15,100,000 Florins for the year 1862, over twice what had been allocated earlier that year. Ferdinand Max argued that the additional funds were needed to construct three more ironclads in short order, lest Austria fall behind its Italian neighbor. The Archduke's modified ironclad program would give the Austrian Empire a navy he believed would be capable of defeating the Regia Marina by the summer of 1862. Despite objections from the Austrian Finance, State, and Foreign Ministries, Emperor Franz Joseph I approved the program in October.

Construction of Austria's second class of ironclads thus began in October 1861 by Stabilimento Tecnico Triestino. Again designed by Romako, the ironclads,, and were all intended to be improvements over the previous "Drache" class. Each ship was designed by Romako to be larger with more powerful engines and carry a larger gun battery than their predecessors. Having encountered political opposition from the Austrian Reichsrat earlier in the year when he requested for additional funds, Ferdinand Max attempted to grow political support for the construction of future ironclads by purchasing some of the armor plating from a rolling mill in Celje owned by Reichsrat member Johann von Putzer. The Henckel von Donnersmarck Zeltweg works were likewise contracted to deliver armor plates for the ironclads, as were the same French firms which had provided the armor for the "Drache" class. Once more, the same subterfuge was employed to obtain the French-made plates and armored ram bows for the warships. These efforts proved to be far easier for Austrian agents based in Geneva than before, due to the growth in arms trafficking which followed the outbreak of the American Civil War. Indeed, the Austrians merely had to pose as Union or Confederate agents in order to avoid detection.

While Emperor Franz Joseph I's support enabled Ferdinand Max's project to proceed despite the objections of several Austrian ministries and the Reichsrat, the political damage caused by the "Oberkommandant der Marine" circumventing the traditional budget process threatened the future development of the Imperial Austrian Navy. Calls were made from within the Reichsrat for Ferdinand Max to be placed under the supervision of the government. As both the operational and administrative head of the Imperial Austrian Navy, the Archduke had considerable leeway to carry out objectives which he himself had the freedom to set. Not even the Imperial Austrian Army had this sort of political and bureaucratic freedom. Ferdinand Max ultimately agreed to a reshuffling of the roles he held within the Imperial Austrian Navy on the condition that a naval ministry would be formed to preserve the achievements he had made over the past half-decade. In January 1862, Franz Joseph I established a new ministry which would oversee the affairs of both the Imperial Austrian Navy, and the Austrian merchant marine, and named Count Matthais von Wickenburg its head. Under this new system, Ferdinand Max continued to be the "Oberkommandant der Marine", but he was no longer responsible for the political management of the fleet. This move was made once again in opposition to the wishes of the Imperial Austrian Army, and the Reichsrat.

In order to address the gap between naval expenditures and construction plans with the will of the Reichsrat, which had rejected Ferdinand Max's ambitious proposals the year before, Emperor Franz Joseph I accepted a proposal from War Minister Count August von Degenfeld to convene a special commission to look at the role of the Imperial Austrian Navy in Austrian foreign and military policy. The commission would also examine the various proposals for the direction of the navy, to include Ferdinand Max's ironclad project. The Emperor convened this commission in February. The key question Franz Joseph I asked the commission was whether or not it was essential to maintain the Imperial Austrian Navy in order for Austria to remain a Great Power in Europe, if it was necessary for the navy to expand to the same size as the Regia Marina, and whether or not it the navy should transition towards prioritizing coastal defense, as opposed to wrestling control of the Adriatic or Mediterranean Seas from Italy in the event of war.

Two camps quickly formed: Those who supported Ferdinand Max's ironclad program and wished to continue the arms race with Italy, and those who supported transitioning the Imperial Austrian Navy into a coastal defense force centered upon protecting the Austrian Empire from naval invasion as opposed to securing the Adriatic against the Regia Marina. Political and nationalist lines helped to divide the two camps. Among those opposing the navy's ironclad program were German liberals from the Austrian interior and the Sudetenland, as well as other nationalities hailing from the inland parts of the Empire who had little interest in expanding Austrian sea power. The leader of the anti-ironclad, pro-coastal defense faction was Karl Möring, a former Austrian Army engineer with experience in heavy artillery. Möring argued that new fortifications and coastal artillery would be sufficient to defend Austria's limited maritime interests and its coastline, and that the large sums of money Ferdinand Max supported spending on constructing ironclad warships would be better spent elsewhere. Möring went so far as to publish a pamphlet attacking the Archduke's program outright, calling it a waste of Austrian finances and resources, while also arguing that an ironclad battle fleet would be of no value against Italy in the event of a war, as the decisive engagements Austria would fight in such a conflict would be on land.

At the commission's meeting in March 1862, Degenfeld disagreed with Möring's analysis and declared that it was imperative for the Imperial Austrian Navy possess an ironclad fleet as powerful as the Regia Marina. Matthais von Wickenburg, the recently appointed naval minister, argued strongly that Ferdinand Max's ironclad construction proposals were essential to protecting Austria's growing merchant marine, and that ignoring Austria's seaborne trade by favoring coastal defense would harm the Austrian economy. Despite these arguments, Austrian Foreign Minister Johann von Rechberg strongly opposed the construction of any further ironclads, arguing along the same lines as Möring that "Austria is a land power, whose fate in case of war will be determined on land."

Rechberg began the commission's second meeting by attacking Ferdinand Max's proposal on financial grounds, arguing that the Imperial Austrian Navy had drastically overstepped financial allotments over the past decade, with the navy consistently overspending the monetary limits placed upon it under the Navy Law of 1850. These arguments were rebutted by Wickenbug and Degenfeld on the grounds that the Navy Law of 1850 had been amended in 1858, and that the large technological advancements which had played out since the First War of Italian Independence had likewise necessitated larger naval spending, as ironclads were far more expensive than traditional wooden ships. Arguments against expanding the navy on the grounds that allocating additional funds for constructing new ironclads may negatively effect the Imperial Austrian Army were rejected by the members, and by a vote of six to five the commission voted to support the goal of maintaining an Imperial Austrian Navy that would be as large as the Italian Regia Marina. The commission had voted in favor of adopting most of Ferdinand Max's ironclad program, but only by a narrow margin, still placing the future of the Austrian ironclad program in doubt.

The death of Italian Prime Minister Cavour in June 1861 was a major setback for the development of the Italian Regia Marina. While Menabrea, the new head of the navy, had secured the deal Cavour had worked on for the "Re d'Italia"-class ironclads to be constructed in New York City, he did not personally believe in the value of the warships and worked to undo the agreement almost as soon as he had signed it. Indeed, Menabrea doubted the value of armored warships altogether, and in the months after Cavour's death, he attempted to redirect the Regia Marina away from ironclad construction for its warships and more towards traditional wooden designs. Menabrea was supported in his skepticism by Nino Bixio, a veteran and key organizer of Garibaldi's Expedition of the Thousand, who had previously served in the Sardinian Navy prior to the unification of Italy. They found opposition in Vice-Admiral Persano, who had won recognition for his efforts in blockading Ancona and Gaeta during Garibaldi's conquest of the Kingdom of the Two Sicilies and the Sardinian invasion of the Papal States which followed.

Similar to their Austrian counterparts who were debating the practicality and usefulness of an ironclad battle fleet, in the autumn of 1861, Menabrea convened a naval commission intended to examine the state of the Regia Marina and determine the value of continuing the construction of ironclad warships. The commission immediately concluded that the Regia Marina needed to be as large as the combined navies of the Kingdom of Spain and the Austrian Empire. Italian worries over a potential Austro-Spanish alliance directed at dismembering the recently unified Kingdom of Italy and restoring the historical influence both nations had enjoyed over the Italian Peninsula in past centuries, though ultimately unfounded, caused much concern among the Italian naval officer corps. This fear was caused in part by the hostile reaction of the Spanish government after the declaration of the Kingdom of Italy. The Spanish, ruled by the House of Bourbon-Anjou, were among the first nations to condemn the invasion and annexation of the Kingdom of the Two Sicilies, and had joined Austria in withholding diplomatic recognition of both the unified kingdom and Victor Emmanuel's claim to the title of King of Italy.

Unlike their Austrian counterparts, the Italian naval commission overwhelmingly opposed the construction of further ironclads, and supported a Regia Marina built around screw-frigates, ships-of-the-line, and other unarmored ships. This decision can in part be contributed to Menabrea's decision to appoint older Italian admirals as commission members, who had less experience with ironclad warships and had served most of their careers aboard wooden vessels. Using their recommendations, Menabrea proposed that four ships-of-the-line be constructed for the Regia Marina as part of the centerpiece of the Italian naval plan for 1862–1865. Menabrea attempted to placate all other factions within the Italian government by offering in the 1862–1865 naval program that the Regia Marina also acquire two ironclads from British shipyards for those who supported armored ships, twelve gunboats for those who supported coastal defense, and several transport ships for those who supported continuing the "Risorgimento" to the shores of Austria. Rather than win over the various different naval factions within Italy however, Menabrea's proposal disappointed nearly everyone and gained few supporters within the Chamber of Deputies. The proposal never got beyond the planning stages however, as Bettino Ricasoli, who had succeeded Cavour as Prime Minister, was forced to resign the office in March 1862. Urbano Rattazzi replaced Ricasoli as Prime Minister, and selected Persano as Italy's Minister of the Navy. Persano quickly went to work scrapping Menabrea's fleet plans, replacing it with plans for more ironclad warships.

In April 1862, news from across the Atlantic Ocean of the Battle of Hampton Roads reached both Italy and Austria. On 8 March 1862, the Confederate ironclad attacked the Union blockade fleet anchored in Hampton Roads. In the ensuing battle, "Virginia" sank the sailing frigates and. The next day, "Virginia" engaged the Union armored turret ship, and the two ironclads fought one another to a standstill.

The battle was be the first ever engagement between ironclad warships, and the difference between the first day of the battle when "Virginia" easily destroyed two wooden frigates, compared to the draw in her battle with the ironclad "Monitor" the following day, left an impression on most of the major navies in the world. Indeed, the battle received worldwide attention. The preeminent naval powers, the United Kingdom and France, halted further construction of wooden-hulled ships after receiving reports of the battle. The use of a small number of very heavy guns, mounted so that they could fire in all directions was first demonstrated by "Monitor" but soon became standard in warships of all types. Shipbuilders also incorporated rams like the kind employed by "Virginia" into the designs of warship hulls around the world. Within Austria and Italy, the Battle of Hampton Roads would prove to have a decisive impact on the course of the Austro-Italian ironclad arms race, influencing both nations' decision to continue with their ironclad programs and effectively resulting in the abandonment of wooden vessels forever.

In Austria, the results of the battle were so decisive that Rechberg reversed his opinion completely upon learning of the engagement, and asked the Reichsrat to approve all the new naval expenditures Ferdinand Max had been calling for. In June, the Austrian Reichsrat approved Archduke Ferdinand Max's budget, but directed the "Oberkommandant der Marine" to cut expenditures not related to training, naval construction and ship maintenance. The Reichsrat also ordered Ferdinand Max to purchase more coal from domestic sources, and to only rarely send warships out beyond the Mediterranean Sea. For 1863, the Imperial Austrian Navy was allocated some 8,900,000 Florins, a huge sum and far higher than previous budget outlays for naval affairs, but this was below the 10,900,000 Florins that Ferdinand Max had originally asked for. In compensation however, Wickenburg was able to acquire a further 4,000,000 Florins from the Reichsrat for the navy's 1862 budget. In November, the bill was approved and the Imperial Austrian Navy received its largest budget in history.

In Italy, the new Italian government convened on 7 March 1862, just one day before the "Virginia" wreaked havoc on the Union's unarmored warships. When news of the battle reached the Italian government, Persano addressed the Chamber of Deputies about the battle and argued Menabrea's proposed four ships-of-the-line were technologically obsolete, and that Regia Marina instead needed to acquire additional ironclads. Persano's plan included purchasing four ironclads from French shipyards, and constructing three additional ironclads domestically. This proposal was further revised in June, when Persano addressed the Chamber of Deputies and shared his support for incorporating Menabrea's earlier plan to purchase two ironclads from British shipyards, bringing the total number of proposed ironclads the Regia Marina would construct or purchase by 1865 to nine.

One week after presenting his ironclad plan to the Chamber of Deputies, Persano obtained approval from Prime Minister Rattazzi's cabinet to proceed. Soon after, Persano signed contracts for four ironclads to begin construction in French shipyards. These ships would ultimately form the. All four ships were designed by French naval architects, but three different shipyards were used to construct them, with and both being constructed at the Société Nouvelle des Forges et Chantiers de la Méditerranée shipyard in La Seyne, while and were constructed at the Gouin et Guibert shipyard in St. Nazaire, and the Arman Brothers shipyard in Bordeaux, respectively.

In October 1862, Persano also placed an order with the British shipyard Mare of Millwall, London, for an armored steam ram. Designed by Italian naval officer Simone Antonio Saint-Bon, financial problems related to the construction of the ironclad resulted in the order being transferred to the shipyard Harrison, also located in Millwall. Saint-Bon had originally intended the ship to be unarmed, relying only on its ram to sink enemy ships, but Harrison engineers revised the plan to include two large-caliber guns. While based on the design of USS "Monitor", the Italians intended to have two turrets as opposed to one. She would become the most expensive warship the Regia Marina had ever ordered at the time. Indeed, the costs to construct the ironclad were so high that Persano had to substitute the two British-built ironclads Menabrea had initially proposed and which he had supported, for this single warship.

In early 1863, Persano also went to work constructing a class of domestically-built ironclads. Shortly after negotiating contracts for French and British-built ships, orders for two ironclads were placed with Cantiere della Foce in Genoa. These two ships, and, were only the second class of ironclad warships to be domestically constructed in Italy. By the time construction on the ships would begin in February 1863, foreign navies had begun to experiment with the central battery ships, a design which discarded the usual broadside arrangement in favor of a shorter battery located amidships. This allowed the "Roma"-class ships to use a significantly shorter and much lighter section of side armor to protect the guns of each ship, which in turn permitted the carrying of heavier, more powerful guns.

At the same time Italy's first ironclads, the "Formidabile" class, were under construction, the first two vessels of the were ordered. These ships, initially,, and, were much like their predecessors in that they were initially conceived as screw-frigates by the Sardinian Navy. "Principe di Carignano" was laid in Genoa by Cantiere della Foce in January 1861, while "Messina" was laid down by the Regio Cantiere di Castellammare di Stabia in September in Castellammare di Stabia. Despite plans to initially construct the class as wooden vessels, changing technology and the emergence of ironclads in foreign navies such as with the and the British, led to efforts to redesign the ships. In an attempt to grow his ironclad program even further, Persano followed the lead Cavour established earlier in converting the "Formidabile" class, and worked to do the same with the "Principe di Carignano" class. His efforts were successful and most of these ships were converted into ironclads despite being in the middle of construction, though "Principe Umberto" was too far advanced in her construction to allow for this conversion, leading to her completion as a wooden vessel. To replace her, a new ship was ordered,. She was laid down in Livorno in March 1863 by Cantiere navale fratelli Orlando. As with their older counterparts, the "Principe di Carignano"-class ships were likewise redesigned with the implicit purpose of wrestling control of the Mediterranean and Adriatic Seas from the Austrian Empire in the event of a war for control of Italian-speaking parts of the Empire.

As a result of Persano's work, by the spring of 1863 the Regia Marina had over a dozen ironclads under contract or under construction, though only the first two ships built during Cavour's tenure as Prime Minister had actually been completed.

The 1862 naval budget presented to Ferdinand Max allowed him to pay for the "Kaiser Max"-class ironclads, but the funds appropriated for 1863 were only enough for two additional ironclads, as opposed to the three he had asked for. Despite this set back, construction on the two ships began in the late spring of 1863. Many of the same individuals who had been instrumental in the design and construction of Austria's earlier ironclads returned to play those roles once more, with Romako designing both ships. These two ironclads were significantly larger than the "Drache" and "Kaiser Max"-class ships, and were originally intended to carry thirty-two 48-pounder muzzle-loading guns, though during the construction process the Navy decided to opt for a battery of new breech-loading guns manufactured by Krupp. At any rate, the Imperial Austrian Navy was forced to hastily complete the ships with only sixteen of the original 48-pounder guns due to the outbreak of the Seven Weeks War in 1866. Named after the Archduke himself, would serve as the lead ship of her namesake class. She was laid down by Stabilimento Tecnico Triestino in Trieste in May 1863 and was followed a month later by her sister ship,. The construction of these ships meant that despite financial challenges, Austria was poised to have seven ironclads by 1865.

The Austrian naval budget of 1862 would prove to be the largest such outlay the Imperial Austrian Navy would receive until 1900. Even so, the 1863 budget of only 8,900,000 Florins was far less than what Archduke Ferdinand Max had hoped for. This limited his ability to construct additional ironclads, having to scrap the third planned ship for the "Erzherzog Ferdinand Max" class. Ferdinand Max ran into even more financial issues when his plans to convert the ship-of-the-line had to be delayed due to a lack of funds. As a result, Austria was only able to construct seven ironclads between 1860 and 1865, as opposed to the nine Ferdinand Max had previously advocated for to the Austrian Reichsrat in April 1861.

In a bid to maintain the navy's finances in the face of potential budget cuts, Ferdinand Max attempted to cut expenditures in nearly every aspect of the Imperial Austrian Navy outside of ironclad construction. Patrols conducted by the Imperial Austrian Navy were severely curtailed, and warships rarely left the Mediterranean Sea. Indeed, with the exception of Tegetthoff's patrol off the coast of Greece to protect Austrian interests in the Balkan kingdom during Greece's constitutional crisis between 1862 and 1863, Austrian warships hardly ever ventured out beyond the Adriatic Sea. The smaller Austrian naval budgets also forced Ferdinand Max to reluctantly turn down proposals from foreign shipbuilders to construct additional ironclad warships for the Imperial Austrian Navy. Among those whose offers the Archduke had to reject for a lack of funds were American shipbuilder John Ericsson, the designer of USS "Monitor", and the Arman Brothers shipyard in Bordeaux, which was constructing the Italian ironclad "Ancona".

Austrian Naval Budgets: 1861–1865
Ferdinand Max was forced to acquire the funds he needed to expand Austria's ironclad battle fleet by selling off older vessels in the Imperial Austrian Navy's possession. Indeed, the speed in which Italy had been constructing or purchasing new ironclads since 1860, coupled with his own desire to keep pace with Italian ironclad acquisitions, forced the Archduke to consider selling nearly all of Austria's wooden vessels. His first opportunity to do so came in November 1862 when he attempted to negotiate the sale of older frigates and corvettes to Confederate arms dealer Louis Merton. In February 1863, this potential deal grew more likely, as the Archduke compiled a series of unarmored ships he believed the Imperial Austrian Navy could part with. This list included a frigate, two corvettes, 14 gunboats and schooners, and nine paddle steamers.Ferdinand Max offered all 26 ships to Merton for roughly six million florins, enough to theoretically enable him to construct the one large armored frigate which could serve as the flagship of the Imperial Austrian Navy. Unfortunately for the Archduke, Merton rejected the offer as the Confederate government had instructed him to only purchase ironclads, or ships capable of navigating the North American Intracoastal Waterway.

Further attempts to purchase ironclads from British shipyards which had been constructing them for the Confederacy in late 1863 failed as well, due to the sheer costs of the warships involved. Despite an increase in funds under the 1864 budget to some 12,100,000 Florins, none of the money the Reichsrat had allocated to the Imperial Austrian Navy were earmarked for ironclad construction or purchases, leaving Ferdinand Max with the same seven ironclads as before. Faced with political gridlock and having been offered the throne of the Second Mexican Empire in October 1863, Archduke Ferdinand Max resigned his post as "Oberkommandant der Marine" in early 1864 before sailing to Mexico aboard the frigate to become Emperor Maximilian I of Mexico.

In the years after Ferdinand Max's departure from Austria, the Imperial Austrian Navy suffered under further political and budgetary constraints. In April 1864, it was proposed that the naval ministry, which the former Archduke had helped to establish, be disbanded. In January 1865, Emperor Franz Joseph I dissolved the ministry and the Imperial Austrian Navy was again placed under the jurisdiction of the Austrian Ministry of War. Under the 1865 budget, just 7,100,000 Florins were allocated towards naval expenses, but once more, none of the funds were designated for warship construction. In 1866, the naval budget grew slightly to 7,800,000 Florins, but for the third consecutive year there would be no funds for additional ironclads, or other warships. Thus, when the Seven Weeks War began in June 1866, the Imperial Austrian Navy would possess only ships which had been constructed during Ferdinand Max's tenure as "Oberkommandant der Marine".

Political chaos and budgetary restraints in Italy likewise forced a slowdown in the rapid pace in which the Regia Marina had been arming itself with ironclad warships. In June 1862, Garibaldi, determined to conquer Rome and bring the Papal States into Italy, sailed from Genoa and landed at Palermo, intending to gather volunteers for the impending campaign to Rome. By the time he crossed over into mainland Italy, he had a force of some two thousand volunteers. After landing at Melito on 14 August, Garibaldi and his forces marched at once into the Calabrian mountains. Far from supporting this second expedition however, the Italian government strongly opposed Garibaldi's actions. General Enrico Cialdini dispatched a division of the regular army, under Colonel Emilio Pallavicini, against Garibaldi's volunteer corps. On 28 August the two forces met in the rugged Aspromonte. After roughly 10 minutes of fighting, there were 15 casualties, including Garibaldi himself who had been shot in the exchange of fire. The fighting ended quickly, as Garibaldi and his volunteers surrendered and were taken prisoner. The political backlash to the "battle" at Aspromonte and Garibaldi's subsequent arrest was enormous in Italy. December 1862, Rattazzi's government fell over the controversy, and Luigi Carlo Farini succeeded him as Prime Minister. Persano was thus removed as Italy's Minister of the Navy. When Marco Minghetti became Prime Minister in March 1863, General Efusio Cugia was chosen to replace Persano.

Cugia inherited a Regia Marina rapidly growing in size and quickly acquiring ironclad warships. Support among the general public and the Regia Marina's officer corps for expanding the navy and constructing new ironclads remained high, with a new naval commission even going so far as to call for a massive battle fleet of 40 ironclads. Additionally, previous opponents of ironclad warships such as Bixio, had since been convinced of their importance following the Battle of Hampton Roads. Indeed, Bixio subsequently became one of the most vocal supporters of Italy's ironclad program after having previously opposed the concept during Persano's years as head of the Ministry of the Navy.

Italian Naval Budgets: 1861–1865
Cugia attempted to carry on the work which began under Cavour and had continued under Persano. In addition to ordering additional transports, shallow-draft gunboats which could be used to seize Venice by sea, Cugia also ordered yet another class of Italian ironclads, named the. The first ship of the class,, was laid down at the Arsenale di La Spezia in August 1865. She was followed by, which was laid down the same month by Regio Cantiere di Castellammare di Stabia. The design for "Principe Amedeo" was prepared by Inspector Engineer Giuseppe De Luca. He had initially planned on using entirely wooden hulls for the ships, but had changed to composite wood and iron construction by the time the ships were laid down. The two ships were also the last Italian ironclads to feature sailing rigs and wooden hulls.

By the time discussions were underway regarding the "Principe Amedeo" class, the Regia Marina had already acquired the French-built armored frigates of the "Formidabile" class, and two more vessels of the "Re d'Italia" class were under construction in the United States. The ironclad "Affondatore" had also been ordered in the United Kingdom, while the four ships of the "Regina Maria Pia" class were under construction in French shipyards. Furthermore, three wooden steam frigates of the "Principe di Carignano" class, already under construction, were being converted into armored ships, and two more ironclads of the "Roma" class had been ordered from Italian shipyards. This meant the two new ships of the "Principe Amedeo" class would bring the Regia Marina's total number of ironclads to 16 ships.

The "Principe Amedeo" class would be the last two ships of this first generation of Italian ironclads however. The sheer number of ironclads the Regia Marina was constructing and ordering, combined with the relatively short time-span in which Italy had engaged in its ironclad build up, was beginning to place a severe strain on the newly unified Kingdom's finances. The dependence on foreign shipyards to construct many of the ironclads also helped to drastically raise costs, already high to begin with, even further. By 1865, Italian naval expenditures began to drastically outpace the budgetary outlays the Chamber of Deputies had authorized for the Regia Marina. Despite the fact that the Italian government had allocated larger naval budgets than their Austrian counterparts for every year between 1861 and 1865, for the first four years of its existence, the Regia Marina consistently spent million of lira more than what the Chamber of Deputies had authorized it. Indeed, the Regia Marina exceeded its budget by roughly 75,000,000 lira between 1861 and 1865.

Italy once again had a turnover in Prime Ministers following public backlash over the September Convention of 1864. Minghetti was ousted and Alfonso Ferrero La Marmora succeeded him on 28 September 1864. La Marmora's first objective as prime minister was to cut government expenditures and finally balance the Italian budget. After appointing General Diego Angioletti to the office of Minister of the Navy, La Marmora worked the shrink the size of the Regia Marina's budget, and bring the era of overspending budgetary outlays to an end. Using Spain's decision to finally recognize the Kingdom of Italy as a catalyst to begin debates over the size of the naval budget, La Marmora argued before the Chamber of Deputies that the Regia Marina possessed or had under construction more than enough warships of all types, including ironclads, to defeat the Imperial Austrian Navy in battle. Despite strong opposition from Persano, Cugia, and Bixio, La Marmora's government began to reduce naval expenditures and ended further ironclad purchases and construction projects for the time being. The government would instead focus on completing ships already under construction or under contract in the lead up to the Seven Weeks War.

Austria's attention was drawn away from Italy at a time when it appeared the ironclad arms race between the two nations was fading. In late 1863, the Schleswig-Holstein Question once again captured the attention of most of the German Confederation after Christian IX of Denmark became King of Denmark and Duke of Schleswig and Holstein. He declared the Duchy of Schleswig an integral part of Denmark in a violation of the London Protocol of 1852, which emphasized the status of the Kingdom of Denmark as distinct from the independent Duchies of Schleswig and Holstein. The annexation of the largely German populations of Schleswig and Holstein gave the German Confederation a "casus belli" to use against Denmark, and the Second Schleswig War began when Prussian and Austrian troops crossed the border into Schleswig in February 1864. After eight months of fighting, the Danes were defeated and the two nations won control of Schleswig and Holstein in the Peace of Vienna.

The Peace of Vienna was not to last however. Shortly after concluding the Second Schleswig War, Minister President of Prussia Otto von Bismarck began to lay the foundations for diplomatically isolating Austria and giving Prussia the opportunity to settle the German Question once and for all by force of arms. In April 1866, the Prussian government signed a secret agreement with Italy, committing each state to assist the other in a war against Austria. On 14 June, the Seven Weeks War began when Prussia attacked Austria's allies in the German Confederation.

At the onset of the war, Italy appeared to have a far stronger navy than Austria did, in large part to the massive ironclad program Cavour and Persano engaged in shortly after the unification of Italy. While the Regia Marina possessed far more ironclads than the Imperial Austrian Navy, Italian Minister of the Navy, Diego Angiolette, realized Italy's naval strength lay primarily on paper only. In June 1866, the Regia Marina was in a state of disarray after years of unstable Italian governments, and consistent turnover among the ranks of the navy's officer corps. Italian sailors had received little to no training, and many warships did not have trained engineers, gunners, or officers. Indeed, despite Austria's multi-ethnic, multi-national Empire which had nearly torn the country apart in 1848, the multi-lingual Imperial Austrian Navy was far more united than its Italian counterpart. Regional divisions which first emerged shortly after the unification of Italy and the establishment of the Regia Marina had begun to flare up in the years shortly before the war. Neapolitan and Sardinian officers regularly quarreled. The naval traditions of Venice also strongly clashed with those of Sardinia, Sicily, and Naples. Many Venetian officers and sailors in Italian service viewed Sardinian, Sicilian, and Neapolitan sailors as inexperienced, leading to severe disputes between men from Venice and the rest of Italy.

Nevertheless, Italy's ironclad advantage of 12 to 7, led to great expectations. Nino Bixio, who had previously opposed the concept of ironclads only to enthusiastically endorse their acquisition by the Kingdom of Italy following the Battle of Hampton Roads, described the Regia Marina as "Incontestably superior" to the Imperial Austrian Navy. These sentiments were shared by the Italian public, the Chamber of Deputies, and the Regia Marina itself. A quick victory over the Imperial Austrian Navy was expected, to be followed by Italian naval dominance over both the Mediterranean and Adriatic Seas.

La Marmora resigned as Prime Minister on 17 June in order to become King Victor Emmanuel II's chief-of-staff. Angiolette likewise resigned as Minister of the Navy in order to be given a command with the Italian army, which was expected to see the bulk of the fighting with Austria. Their replacements, Bettino Ricasoli as Prime Minister and Agostino Depretis as Minister of the Navy, set out to secure Italian dominance over the Adriatic. Shortly after Italy declared war on Austria on 20 June, Ricasoil laid out plans for Italy's annexation of Venice, Trentino, Trieste, the Dalmatian Coast, Istria, and Fiume. Depretis strongly believed the Regia Marina was strong enough to secure these conquests. On 25 June, the Regia Marina's main battle fleet, led by Persano, made port at Ancona in anticipation of engaging the Imperial Austrian Navy in the Adriatic.

While Italy prepared for a naval offensive in the Adriatic in order to put pressure on Trieste, Venice, and Fiume, Austria's naval strategy at the beginning of the war was primarily defensive-oriented. The two latest Austrian ironclads, "Ferdinand Max" and "Habsburg", were awaiting the final delivery of their Krupp guns at the onset of the war. The conflict with Prussia meant these guns could not be delivered, forcing the Imperial Austrian Navy to install old smooth-bore guns aboard the ships instead. Nevertheless, Rear Admiral Wilhelm von Tegetthoff selected "Ferdinand Max" as the flagship of his fleet and began training exercises with its crew off the coast of Fasana. Owing to the Italian advantage in ironclads, Tegetthoff worked to upgrade his existing wooden vessels for combat as well, draping many in chains and scrap iron to increase their protection in battle. Following the Battle of Custoza on 24 June, Tegetthoff was given permission by Field Marshall Archduke Albrecht to attach the Regia Marina as he saw fit. Consequentially, Tegetthoff brought the Imperial Austrian Navy to Ancona on 26 June in an attempt to draw out the Italians, but the Italian commander, Admiral Persano, refused to engage. Tegetthoff made another sortie on 6 July, but again could not bring the Italian fleet to battle.

On 16 July, Persano took the Italian fleet, with twelve ironclads, out of Ancona, bound for the island of Lissa, where they arrived on 18 July. With them, they brought troop transports carrying 3,000 soldiers. Persano then spent the next two days bombarding the Austrian defenses of the island and unsuccessfully attempting to force a landing. Tegetthoff received a series of telegrams between 17 July and 19 July notifying him of the Italian attack, which he initially believed to be a feint to draw the Austrian fleet away from its main bases at Pola and Venice. By the morning of 19 July, however, he was convinced that Lissa was in fact the Italian objective, and so he prepared his fleet to attack. As Tegetthoff's fleet arrived off Lissa on the morning of 20 July, Persano's fleet was arrayed for another landing attempt. The latter's ships were divided into three groups, with only the first two able to concentrate in time to meet the Austrians. Tegetthoff had arranged his ironclad ships into a wedge-shaped formation, leading with "Erzherzog Ferdinand Max" at the center. The ironclads "Don Juan d'Austria", "Drache", and "Prinz Eugen" were on the right, and the ironclads "Habsburg", "Salamander", and "Kaiser Max" were on his left. The Austrian wooden warships of the second and third divisions followed behind in the same formation.

Shortly before the action began, Admiral Persano left his flagship, the ironclad "Re d'Italia", and transferred to the turret ship "Affondatore", though none of his subordinates on the other ships were aware of the change. They were thus left to fight as individuals without direction. More dangerously, by stopping "Re d'Italia", he allowed a significant gap to open up between Vacca's three ships and the rest of the fleet. The battle began with "Principe di Carignano" opening fire at a range of roughly on the approaching Austrians. The Italian gunnery was poor, and their initial shooting missed the Austrian ships, allowing Tegetthoff to make a pass through the gap in the Italian line. This attempt failed however to ram any of the Italian ships, forcing him to turn around and make another pass. During this first approach, the Austrian ironclad "Prinz Eugen" opened fire on Persano's lead ships with her bow guns but did not score any hits. In response, the Italian ironclad "Affondatore" attempted to ram her, but narrowly missed the Austrian warship. Meanwhile, the Austrian ironclads "Habsburg" and "Salamander" were not as heavily engaged in the ensuing melee and did not attempt to ram any Italian vessels, apart from a single failed attempt by "Salamander" to strike an unidentified Italian ironclad. Instead, the ships employed converging fire, though largely without success. During this period, the leading Italian ironclads, "Principe di Carignano" and "Castelfidardo", opened fire at long range on the Austrian ironclads "Habsburg", "Kaiser Max", and "Salamander", though the Italians only managed to score indirect hits on "Salamander", hitting her 35 times but failing to score any decisive hits or inflict serious damage.

Meanwhile, the Austrian ironclad "Drache" engaged the coastal defense ship with concentrated broadsides, including hot shot, which started a serious fire aboard "Palestro". The latter attempted to withdraw, and was able to use her superior speed to escape from "Drache". Left without her original target, "Drache" turned to fire at "Re d'Italia" along with several other Austrian vessels. One of them disabled the Italian ironclad's rudder, leaving her incapable of maneuvering. In the ensuing firefight however, "Drache" was hit several times; one shell struck her commander, Captain Moll Heinrich von Moll, in the head, killing him instantly.

"Re d'Italia"s disabled rudder presented another opportunity for Tegetthoff to ram the vessel at full speed. After two collisions which occurred at angles too oblique to inflict serious damage, "Erzherzog Ferdinand Max" struck the Italian ship directly. "Erzherzog Ferdinand Max"s ram tore a gaping hole in "Re d'Italia"s hull on the port side below the ship's waterline, though the Austrian ironclad sustained no significant damage herself. Tegetthoff reversed course, allowing the Italian ironclad to lurch back to port and quickly sink. He initially ordered his crew to lower boats to pick up the Italians struggling in the water, but the Italian ironclad "San Martino" was approaching, and he could not allow his ship to become a stationary target. Instead, he ordered the aviso to remain behind and pick up the survivors while "Erzherzog Ferdinand Max" engaged "San Martino". The other Italian ships, however, did not realize "Kaiserin Elizabeth" was attempting to pick up the Italian survivors, and so opened fire on her, driving her away from the men in the water.

Several Italian ironclads attempted to capture or sink "Kaiser", the largest unarmored Austrian ship in the battle. After the melee had begun, the Italian ships "Castelfidardo", "Varese", and "Principe di Carignano" circled around "Kaiser", trading broadsides with her. Persano also arrived in "Affondatore" and unsuccessfully tried to ram "Kaiser", but missed and struck only a glancing blow. Shortly thereafter, "Kaiser" rammed the ironclad "Re di Portogallo" in an attempt to protect the Austrian unarmored ships and "Kaiserin Elizabeth". "Kaiser" also struck a glancing blow, however, and inflicted little damage. "Re di Portogallo" fired her light guns into the ship in response, starting a fire aboard "Kaiser", and killing or wounding a number of Austrian gunners before the warship could break free. "Affondatore" then made a second, unsuccessful attempt to ram "Kaiser". Though she missed with her ram once more, "Affondatore" did score a hit with one of her guns, badly damaging "Kaiser", killing or wounding twenty of her crew. "Kaiser" responded by firing her guns into "Affondatore"s deck, badly holing it and starting a fire, while riflemen in her fighting tops shot at Italian sailors. In addition, a shot from "Kaiser" struck one of "Affondatore"s turrets, jamming it for the remainder of the battle.

While the melee continued, the Austrian ironclad "Don Juan d'Austria" initially attempted to follow Tegetthoff in his second pass, but quickly lost contact with Tegetthoff's flagship in the chaos. Italian ironclads surrounded the Austrian ship, forcing the ironclad "Kaiser Max" to come to her aid. Thereafter, "Re di Portogallo" and the Austrian ironclads exchanged broadsides for around half an hour before the Austrians engaged "Affondatore". The latter scored three hits on "Don Juan d'Austria"s unarmored bow, but these shots caused little damage. The melee which followed Tegetthoff's second pass was to his advantage, as the Austrian commander wished to rely upon ramming tactics in order to compensate for the Regia Marina's advantage in ironclads and the Imperial Austrian Navy's inferior guns. Indeed, the ensuing melee was so chaotic that the Italian ironclad "Regina Maria Pia" collided with her sister ship "San Martino", damaging the latter's ram bow. The melee further hampered Italian efforts to use their superior numbers against the Austrians when the ironclad "Ancona" became entangled with the coastal defense ship "Varese", allowing a group of Austrian wooden ships to escape the engagement unharmed.

By this time, "Palestro" was burning badly from her engagement with "Drache" and from 15 broadsides fired by "Kaiser Max", and was soon destroyed by a magazine explosion. Persano broke off the engagement, having lost two ships, and though his squadron still outnumbered the Austrians, he refused to counter-attack with his badly demoralized forces. In addition, the fleet was low on coal and ammunition. The Italian fleet began to withdraw, followed by the Austrians; Tegetthoff, having gotten the better of the action, kept his distance so as not to risk his success. Additionally, the Austrian ships were slower than their Italian counterparts, and so they could not force a second engagement. As night began to fall, the opposing fleets disengaged completely, heading for Ancona and Pola, respectively. In the course of the battle, the Imperial Austrian Navy only suffered 38 killed, compared to the 612 dead among the ranks of the Regia Marina.

The day after the Battle of Lissa, Tegetthoff was promoted by Emperor Franz Joseph I to the rank of vice admiral. Meanwhile, Admiral Persano claimed Lissa was an Italian victory despite the Italians losing two ironclads and failing to sink or capture a single Austrian ship. Shortly after returning to Ancona with his fleet on 21 July however, Persano saw his story fall apart as the truth about the battle's results swiftly turned public opinion about the conduct of the Regia Marina against the Italian commander. As an Italian Senator, Persano saw the Senate of the Kingdom of Italy place him on political trial in April 1867 and ultimately forced the admiral to retire in disgrace.

Despite the Austrian victory at Lissa, the Seven Weeks War would ultimately be decided on land. The decisive Battle of Königgrätz had occurred earlier in the month, resulting in heavy Austrian casualties and signaling Prussia's eventual victory over Austria in the war. Just six days after the Battle of Lissa, Austria and Prussia signed a preliminary peace agreement at Nikolsburg. With Austrian dominance of the Adriatic Sea confirmed, and with reinforcements arriving on the Italian front from Germany, Austria's negotiating position with the Italians improved significantly and Italy was thus forced to sign the Armistice of Cormons on 12 August. Under the terms of the subsequent Treaty of Vienna, signed on 12 October, Italy gained possession of Venetia, but nothing else from the Austrian Empire.

The battle of Lissa proved to be the climax of the Austro-Italian ironclad arms race, though the naval competition between the two nations would continue for another 16 years. Following the signing of the Treaty of Vienna, Austria was diplomatically isolated which caused a considerable amount of uncertainty over the future of its naval forces. Tegetthoff however was widely praised for his performance at Lissa. In addition to being promoted and receiving the Military Order of Maria Theresa on behalf of the Austrian Empire, Emperor Maximilian I of Mexico, who had overseen the construction of Austria's entire ironclad fleet as Archduke Ferdinand Max, congratulated Tegetthoff for his victory and awarded the Austrian vice admiral the "Grand Cross of the Imperial Order of Our Lady of Guadalupe", the highest Imperial Order that could be bestowed by the Mexican Emperor.

Despite its relatively limited impact on the outcome of the Seven Weeks War, the Battle of Lissa would prove to have a major impact on the development of naval warfare for the next 60 years. As the first naval engagement between multiple armored warships in history, the Battle of Lissa would be the largest fleet engagement to occur in the century between the Battle of Trafalgar and the Battle of Tsushima. Most of the world's major navies adopted Tegetthoff's ramming tactics and subsequently incorporated ram bows onto warships well into the 1920s.

In the years after the Battle of Lissa, the Regia Marina fell into an era of steep decline. Having already having overspent its naval budgets by millions of lira in the years before Lissa, the Regia Marina saw its budget cut throughout the 1860s and 1870s. With Austrian control over the Adriatic Sea solidified following the Seven Weeks War, it entered the post-war era in a state of political and financial disarray as most of the Regia Marina's leadership, including Persano, had been disgraced by the Battle of Lissa and the failure to achieve any naval gains in the Adriatic.

In the autumn of 1867, Menabrea, who had previously been the primary objector to the construction of Italy's ironclad battle fleet after Cavour's death in 1861, came to power as Prime Minister of Italy. Meanbrea continued his record of opposing ironclad warships and scrapped all plans to construct new ships which had not already been ordered shortly after taking office. These events caused construction of new ironclad warships to come to a halt after the competition of the "Principe Amedeo" class. Italy did not lay down another ironclad until 1873.

Austria's defeat in the Seven Weeks War forced Austria to determine a new set of foreign and domestic policies for the future, as Austria's interests since the days of the Holy Roman Empire had primarily been found in Italy and Germany. The Empire thus reformed itself into the Austria-Hungarian Empire following the adoption of the Austro-Hungarian Compromise of 1867 (German: "Ausgleich"), which re-established the sovereignty of the Kingdom of Hungary and placed Hungarians within the Empire on an equal footing with Austrians. Under the "Ausgleich", Emperor Franz Joseph I would be crowned as King of Hungary, while a separate parliament at Pest with powers to enact laws for the lands of the Holy Crown of Hungary would be established.

From 1867 onwards, the abbreviations heading the names of official institutions in Austria-Hungary reflected their responsibility: (German: "" or Imperial and Royal) was the label for institutions common to both parts of the Monarchy. This meant that following the transformation of the Austrian Empire into the Austro-Hungarian Empire, the Imperial Austrian Navy was itself reformed into the Imperial and Royal Navy (German: "kaiserliche und königliche Kriegsmarine"), though the navy was commonly referred to either as the "k.u.k. Kriegsmarine" or simply the "Austro-Hungarian Navy".

Seizing upon the decline of the Regia Marina in the years immediately after the Battle of Lissa, Tegetthoff worked to continue the efforts of Archduke Ferdinand Max of expanding the ironclad fleet of the now Austro-Hungarian Navy. Tegetthoff found political allies in the Austro-Hungarian Minister of War Carl von Franck and retired Admiral Bernhard von Wüllerstorf-Urbair. Wüllerstorf's and Franck's primary arguments in favor of continuing with the ironclad program Austria had engaged in prior to the Seven Weeks War lay largely along economic grounds. The two believed that constructing new ironclad warships would rejuvenate Austria-Hungary's economy following the defeat at the hands of Prussia and Italy, and that such a fleet would help to open up new commercial opportunities in the Levant and the Middle East. These proposals would be shelved however while Austria continued to reel from the military defeats inflicted by Prussia, and several cabinet reshufflings by Emperor Franz Joseph I resulted in a government more interested in pursuing revenge against Prussia than constructing new ironclads, which would be of little use in a hypothetical second war with Prussia.

Nevertheless, in the first budget passed following the "Ausgleich", funds were appropriated to renovate and upgrade Austria-Hungary's oldest ironclads, "Drache" and "Salamander". Additional funds were set aside to re-arm the entire fleet with new RML guns from the United Kingdom. Furthermore, the first post-war ironclad of the Austro-Hungary Navy,, was laid down at the Stabilimento Tecnico Triestino shipyard in San Marco in June 1867. As part of the post-"Ausgleich" reforms, Austria-Hungary attempted to court France and Italy as potential allies to curb future Prussian expansion. This potential alliance and a re-orientation of Austro-Hungarian foreign policy back towards Germany threatened the development of the Austro-Hungarian Navy and thus the construction of additional ironclads, though the talks ultimately failed after France and Italy could not agree on the Roman Question.

Tegetthoff was appointed Chief of the Naval Section of the War Ministry and appointed to the post of "Marinekommandant" in early 1868, making him the operational and political head of the Austro-Hungarian Navy. He quickly went to work reforming the operation, structure, and regulations which governed the Austro-Hungarian Navy. As part of this broad series of reforms, Tegetthoff also began work drafting the first battle fleet proposal the navy had seen since Ferdinand Max's proposal in 1858. While the 1868 budget had included funds which would eventually be used to convert the ship-of-the-line "Kaiser" into an ironclad casemate ship, Tegetthoff had far more ambitious plans. In September 1868, the "Marinekommandant" outlined his proposal to Emperor Franz Joseph I. The plan called for a massive reinvestment in Austria-Hungary's ironclad fleet, with the eventual goal of some 15 ironclad warships, and an additional 19 unarmored warships of various types. Tegetthoff intended for the ironclad fleet to be the backbone of the Austro-Hungarian Navy, securing its influence in the Adriatic and even Mediterranean Seas. As the Regia Marina was still recovering from the political chaos which gripped its ranks after the defeat at Lissa two years earlier, this proposal presented the opportunity for Austria-Hungary to finally secure naval dominance over its Italian counterpart and put an end to the ironclad arms race which the two nations had been engaged in since 1860. Tegetthoff's plan was the most expensive proposal ever submitted on behalf of the navy up to that point in time, with a final cost of 25,300,000 Florin, and construction on the ironclads would take place over a ten-year period.

While Tegetthoff found support for the project from Emperor Franz Joseph I, the "Marinekommandant" still had to obtain approval from the Austrian and Hungarian Delegations for Common Affairs in order to proceed with the plan. Laying out his proposal to the delegations in December 1868, Tegetthoff won approval to begin proceeding with his plans, with 8,800,000 Florins being devoted to the Austro-Hungarian Navy's 1869 budget. While this was only a slight increase over 1868, the additional funds were enough for the navy to begin construction on two new ironclads,, and. They were the first Austro-Hungarian ironclads to be built after the navy had finished its study of the results of the Battle of Lissa. Once more, Chief Engineer Josef von Romako, who had designed all of the navy's earlier ironclad vessels, was tasked with preparing designs for two new warships. The lessons Romako came away with from the Battle of Lissa lent credibility to the idea that the new ships should favor heavy armor and the capability of end-on fire to allow both ships to be able to effectively attack with their rams. This design change over previous ironclads however required compromises in the number of guns and the power of each ship's machinery; to make up for carrying fewer guns, Romako adopted the same casemate ship design as "Lissa". Unlike the wooden-hulled "Lissa", however, the hulls of "Custoza" and "Erzherzog Albrecht" would be constructed with iron, the first major Austro-Hungarian warships to feature such a design. "Custoza" was laid down by Stabilimento Tecnico Triestino in Trieste in November 1869, while "Erzherzog Albrecht" followed in June 1870.

Tegetthoff followed up on this progress with a new proposal for the 1870 budget, which would establish fixed annual budgets similar to the German Naval Laws that German Secretary of State for the Navy, Alfred von Tirpitz, would establish near the turn of the century. This time however, Tegetthoff emerged from the political debates in Vienna and Pest with only a partial victory. While the Austro-Hungarian Navy's 1870 budget was increased to 9,800,000 Florins, the delegations rejected the "Marinekommandant"s proposal for a fixed naval budget, and no additional funds were allocated for new ironclads. These budgetary restraints would result in "Erzherzog Albrecht" being built to a slightly smaller design than "Custoza". Nevertheless, in the four years since the Battle of Lissa, the Austro-Hungarian Navy had begun work on three new ironclads, and the older ship-of-the-line "Kaiser" had been converted into a casemate ironclad.

While Tegetthoff spent most of 1870 observing the Franco-Prussian War and securing funds to rush completion of the ironclads already under construction, the new ironclads Austria-Hungary was constructing had begun to bring Tegetthoff close to his ambitious goal of 15 armored warships by 1878. However, after obtaining new funds in January 1871 to speed up the acquisition of the British-made armor plating of "Custoza" and "Erzherzog Albrecht", Tegetthoff's health failed rapidly. Catching pneumonia after walking home in a rainstorm, Tegetthoff died in April 1871. His death would also mark a period of substantial decline for the Austro-Hungarian Navy, as Europe's changing political outlook in the face of the recently concluded Franco-Prussian War, combined with improved Austro-Italian relations in the decade to come, severely undermined future arguments for the expansion of the Austro-Hungarian Navy.

Tegetthoff's successor to the office of "Marinekommandant" was his old political rival, Friedrich von Pöck. While he commanded the ship-of-the-line "Kaiser" in the Second Schleswig War, Pöck had been given shore assignments throughout the Seven Weeks War, denying him the same sort of fame and public admiration that Tegetthoff had enjoyed after the Battle of Lissa. Almost immediately after taking office, Pöck faced chronic budgetary problems, owing in large part due to obstructionism from Hungarians and liberal Germans within the Austro-Hungarian government, the former viewing naval matters as an Austrian concern, and the latter opposed to naval expansion in light of the continued deterioration of the Regia Marina following the Battle of Lissa. Additionally, since he was not involved in Tegetthoff's victory at the Battle of Lissa, he lacked the personal prestige to command the respect of the government, which Tegetthoff had successfully used to secure the construction of four ironclads in the four years since the Seven Weeks War. As a result, Pöck had great difficulty securing the funding for new ironclad warships during his tenure.

Pöck finally won approval for a new ironclad,, in 1875 but he could not convince the delegations to allocate funds for a sister ship he had planned to name "Erzherzog Karl". "Tegetthoff" was laid down in April 1876, the only ironclad to be constructed for the next eight years. Confronted with an unwillingness within the Austro-Hungarian government to strengthen the fleet further, Pöck resorted to subterfuge to acquire the funds he needed. In 1875, he asked for a budget increase to "rebuild" the three elderly "Kaiser Max"-class ironclads. In fact, Pöck sold the old ships for scrap, reusing only their machinery, armor plates, and other fittings for the construction of three new ships, which were given the same names to obscure his sleight of hand.

Austro-Hungarian Naval Budgets: 1867–1884
Throughout this period, the navy's annual budget continued to fall, from a peak of 11,100,000 Florins in 1872 to 8,500,000 Florins in 1880. Pöck continued to push for another new ironclad, but by 1880 his efforts were only symbolic: in his proposed budget estimates for the year, he included a new ironclad warship, but did not actually allocate any funds for it. Unable to increase the strength of the ironclad fleet, Pöck turned to less expensive means to defend Austria-Hungary's coastline, including development of naval mines and self-propelled torpedoes. He ordered the first torpedo boat, "Torpedoboot I", from Britain in 1875, followed by five more from Britain and four more from domestic shipyards thereafter. In the late 1870s and early 1880s, he also ordered the four torpedo cruisers,,, and.

These new orders marked not only a change in Austro-Hungarian naval policy, but also the end of the Empire's participation in the ironclad arms race, though two final ironclads would be built in 1884. Pöck succeeded in securing funding for the first of these two ships in 1881, having obtained authorization for to replace the aging ironclad "Salamander". The design for the new ship was prepared by Josef Kuchinka, the Director of Naval Construction and Romako's successor to the post. "Kronprinz Erzherzog Rudolf" was laid down in January 1884.

A second ironclad and Austria-Hungary's last,, was authorized shortly thereafter by Pöck's successor, Maximilian Daublebsky von Sterneck. Sterneck ultimately had to resort to the same budgetary tricks employed earlier by Pöck in order to construct "Kronprinzessin Erzherzogin Stephanie". She was laid down in November 1884 using funds that had been allocated to modernize the ironclad "Erzherzog Ferdinand Max". Sterneck attempted to conceal the deception by referring to the ship officially as "Ferdinand Max", though the actual "Ferdinand Max" was still anchored in Pola as a school ship. Eventually the "fait accompli" of the ironclad's construction was accepted by the delegations and the new ship was commissioned under the name "Kronprinzessin Erzherzogin Stephanie" in July 1889. After the construction of these two final ironclads, nearly another decade would pass before the Austro-Hungarian Navy secured funding for new capital ships, the three s begun in 1893.

Italy's defeat at the Battle of Lissa continued to inhibit naval expansion in the 1870s. A naval commission convened in 1871 concluded that the Regia Marina's capabilities in the Adriatic and Mediterranean were so poor in comparison to Italy's neighbors that future Italian naval policy should be oriented more towards coastal defense than constructing a powerful battle fleet. The commission's findings recommended future funds should be diverted away from further ironclads and towards establishing over 30 coastal forts instead. These findings resulted in the Italy's 1871 naval budget being cut to 26,800,000 lira, the lowest amount ever afforded to the Regia Marina in the years after Lissa. Incidentally, the 1871 budget would also mark the only time in history where the Regia Marina received less funds than the Austro-Hungarian Navy. The 1871 budget would signal the nadir of Italian naval fortunes however, as subsequent budgets would slowly rise throughout the 1870s as newly appointed naval engineer Benedetto Brin worked to rebuild the Regia Marina.

Brin began working on a new design for an Italian ironclad which would begin the transition of naval ships away from ironclads and closer to battleships which would come to dominate the navies of the early 20th century. His initial design rejected the casemate concept which formed the bulk of existing ironclads of the era, and instead built upon the turret ship design which existed in the Italian ironclad "Affondatore". This design incorporated an entirely iron and steel-built hull, and centered around four guns placed upon two large turrets. Brin's arguments in favor of constructing a warship of this scale rested upon Italy's diplomatic isolation following the Franco-Prussian War, as Italy had poor relations with both Austria-Hungary and France after failed negotiations to ally with both in the late 1860s. The opening of the Suez Canal in 1869 also greatly increased commercial traffic in the Mediterranean, which promised to grow the Italian economy and merchant marine in the coming years. A new fleet of ships would thus be necessary to protect Italian interests in the Mediterranean. Brin eventually obtained political support in the Chamber of Deputies for the construction of two ships built to his design. These two ships would go on to become the s: and. Both ships were laid down in January 1873, with "Caio Duilio" being constructed at the Regio Cantiere di Castellammare di Stabia shipyard in Castellammare di Stabia, and her sister ship "Enrico Dandolo" at the Arsenale di La Spezia. The four guns of each ship, as well as their engines, were constructed in the United Kingdom and imported, which raised the cost of the already expensive warships.

Italian Naval Budgets: 1874–1880
Before either of these ships were even launched however, the Chamber of Deputies agreed to the construction of two additional ironclads to accompany the "Caio Duilio" class. The s would prove to be among the largest ironclad warships in the world at the time of their commissioning. The "Italia" class consisted of the ironclads and. Both ships were designed by Brin, who chose to discard traditional ironclad belt armor entirely, relying instead on a combination of very high speed and extensive internal subdivision to protect the ships.

As the second class in Italy's new warship program designed to give the Regia Marina favorable numbers over the Austro-Hungarian Navy, the "Italia" class not only presented Italy's desire to rebuild its naval power following the Battle of Lissa, but it also signaled an era of changing technology which would soon put the ironclad arms race between Italy and Austria-Hungary, and indeed the ironclad itself, to an end. The design of the "Italia" class, such as their speed, light armor, and armament of very large guns, has led some naval historians to refer to the "Italia" class as prototypical battlecruisers, blurring the lines between "ironclads" and the future warships which would come to dominate the early 20th century. "Italia" was laid down at Regio Cantiere di Castellammare di Stabia in January 1876, while Cantiere navale fratelli Orlando began construction on "Lepanto" in November that same year.

After his success with designing and obtaining the necessary money to construct the "Caio Duilio" and "Italia"-class ironclads, Brin was appointed Italian Minister of the Navy in March 1876. After taking office, he began drawing up plans for a major fleet expansion, the largest in Italian history. Brin envisioned a modern Regia Marina of 16 ironclads, 10 cruisers, and 46 smaller warships. The project would take a decade to implement and cost 146 million lira. Brin obtained the support of King Victor Emmanuel II for the plan in November 1876, and nine months later the Chamber of Deputies approved the package, including multiple internal reforms within the Regia Marina designed to save money for the implementation of Brin's plan, including the decommissioning and scrapping of several older warships. By the time "Italia" was commissioned into the Regia Marina in October 1885, all three ships of the "Principe di Carignano" class, as well as the ironclad "Re di Portogallo", had either been broken up or decommissioned.

Political and technological developments throughout the 1870s and 1880s would ultimately bring the naval arms race, which Austria-Hungary and Italy had been engaged in for roughly 20 years, to a close. The primary political and technological drivers of this would be the signing of the Triple Alliance in 1882, and the emergence of the pre-dreadnought battleship.

Italy would construct two more classes of ironclads, the and the. However, by the time, the first ship of her namesake class, was laid down by Regio Cantiere di Castellammare di Stabia on 3 August 1881, the ironclad arms race between Italy and Austria-Hungary was coming to an end. The completion of in February 1895, the final ironclad of the Regia Marina, gave Italy the third largest navy in the world, behind only the United Kingdom and France. Despite this, by the time the final ships of the "Re Umberto" class had been completed, the United Kingdom had already begun building the s, the first pre-dreadnought battleships, which rendered older ironclad battleships obsolete. In addition, technological progress, particularly in armor production techniques—first Harvey armor and then Krupp armor—contributed to the ships' rapid obsolescence.

By the 1880s, the concept of the ironclad was giving way to that of the battleship. This decade marked the beginning of the era of the "Pre-dreadnought battleship", sea-going battleships built between the mid- to late 1880s and 1905. The distinction however between the era of the ironclad and the era of the pre-dreadnought is blurred by the fact that ironclad designs evolved into battleships over time. This can be seen in the outline of the last ironclads build by Austria-Hungary and Italy, which when contrasted with each nation's oldest ironclads, illustrate major differences in design and construction. The ironclads and pre-dreadnoughts of the 1870s and 1880s were largely built from steel, and protected by hardened steel armor, as opposed to the iron plating and casemate designs of older ironclads. The distinctions between later ironclads and pre-dreadnought battleships can also be found in the armament and propulsion systems of each ship. Pre-dreadnoughts carried a main battery of very heavy guns in barbettes in either open or armored gunhouses which were supported by one or more secondary batteries of smaller guns. They were also powered by coal-fuelled triple-expansion steam engines.

The distinction between ironclads and pre-dreadnought battleships became blurred in foreign navies outside of Italy and Austria-Hungary as well, most notably in the British Royal Navy with the, ordered in 1880. These ships reflected developments in ironclad design, being protected by iron-and-steel compound armor rather than wrought iron. Equipped with breech-loading guns, the Admirals continued the trend of ironclad warships towards gigantic weapons. The guns were mounted in open barbettes to save weight. Some historians see these ships as a vital step towards pre-dreadnoughts; others view them as a confused and unsuccessful design.

In contrast to the chaotic development of ironclad warships in preceding decades, the 1890s saw navies worldwide start to build battleships to a common design as dozens of ships essentially followed the design of the British. The similarity in appearance of battleships in the 1890s was underlined by the increasing number of ships being built. New naval powers such as Germany, Japan, the United States, and Italy and Austria-Hungary, began to establish themselves with fleets of pre-dreadnoughts, while the navies of the United Kingdom, France, and Russia expanded to meet these new threats. The decisive clash of pre-dreadnought fleets was between the Imperial Russian Navy and the Imperial Japanese Navy during the Battle of Tsushima in 1905.

The pre-dreadnoughts themselves would later be made obsolete by the arrival of in 1906. "Dreadnought" followed the trend in battleship design to heavier, longer-ranged guns by adopting an "all-big-gun" armament scheme of ten 12-inch guns. Her innovative steam turbine engines also made her faster. The existing pre-dreadnoughts were decisively outclassed, and new and more powerful battleships were from then on known as dreadnoughts while the ships that had been laid down before were designated as pre-dreadnoughts.

The changing nature of political alliances in the 1880s also spelled the end of the arms race. For 20 years, both Italy and Austria-Hungary had used the threat of the other to justify engaging in constructing and purchasing numerous ironclad warships. However, following the first dissolution of the League of the Three Emperors in 1878, Austro-Hungarian Foreign Minister Baron Heinrich Karl von Haymerle began negotiations with Rome to improve relations between Italy and Austria-Hungary. Pöck argued strongly against improving relations with Italy, recognizing that a friendly Italy would effectively render all arguments for a sea-going Austro-Hungarian Navy largely pointless. Nevertheless, Italian foreign policy views since the 1860s had altered considerably, and Italy's attention had since turned away from Tyrol and Trieste and instead towards North Africa. In an attempt to redirect Italian territorial ambitions away from Austria-Hungary, Haymerle encouraged Italian claims on Tunis, and promised Austria-Hungary's diplomatic support for Italian colonial plans in North Africa in exchange for Italian guarantees to respect Austro-Hungarian influence in the Balkans.

Italy was further distracted from Austria-Hungary and the naval arms race between the two nations when France established a protectorate over Tunisia in May 1881. Italy had coveted the Beylik of Tunis as part of its own colonial ambitions. Anti-French sentiment subsequently gripped the Italian public, press, and politicians, but lacking any allies, Italy was powerless to stop the incorporation of Tunisia into the French colonial empire. As a result, Austro-Hungarian attempts to improve relations with Italy began to be warmly received in Rome, eventually leading to a visit to Vienna by King Umberto I in October 1881. This was followed up with the signing of the Triple Alliance between Italy, Austria-Hungary, and Germany in May 1882.

Italy would continue to build up its naval force in the years after the singing of the Triple Alliance, but the terms of the treaty led Italy to concede the Adriatic Sea to the interests of Austria-Hungary. Instead, Italian naval plans were redirected towards France. Brin's naval program thus went forward within the Regia Marina, but Italian attentions were redirected to the Western Mediterranean and Tyrrhenian Sea. For Austria-Hungary, the Triple Alliance ended the threat of Italian irridentism aimed at many of its coastal possessions, gave the Empire a relatively free hand in the Adriatic, and protected two of Austria-Hungary's land borders in the event of a war with Russia. However, the results of the alliance would prove to be disastrous for the Austro-Hungarian Navy. The lack of a strong potential opponent determined to contest the Adriatic Sea eliminated most arguments in favor of a large fleet. Indeed, it would not be until 1893 before the Austro-Hungarian Navy would construct another class of capital ships.

Even after Italy and Austria-Hungary became allies under the Triple Alliance however, mutual suspicions and areas of conflict remained between both nations. Italy would go on to improve its relations with France after 1902, negating one of the key issues which led to it joining the Triple Alliance in the first place. Furthermore, enduring nationalism among Italians within Austria-Hungary, and Italian irredentist claims of important Austrian territories, such as Tyrol and Trieste, continued to concern Austria-Hungary. Likewise, Italy grew worried at the naval expansion Austria-Hungary engaged in at the onset of the 20th century, particularly under "Marinekommandant" Hermann von Spaun and later under Rudolf Montecuccoli. These trends would spark a second naval arms race centered around the construction of battleships at the turn of the century, which would later intensify considerably in the years leading up to World War I.

Austria's defeat in the Seven Weeks War forced Austria to determine a new set of foreign and domestic policies for the future, as Austria's interests since the days of the Holy Roman Empire had primarily been found in Italy and Germany. The Empire thus reformed itself into the Austria-Hungarian Empire following the adoption of the Austro-Hungarian Compromise of 1867 (German: "Ausgleich"), which re-established the sovereignty of the Kingdom of Hungary and placed Hungarians within the Empire on an equal footing with Austrians. Under the "Ausgleich", Emperor Franz Joseph I would be crowned as King of Hungary, while a separate parliament at Pest with powers to enact laws for the lands of the Holy Crown of Hungary would be established.

Austro-Italian ironclad arms race

A naval arms race between the Austrian Empire and Italy began in the 1860s when both ordered a series of ironclad warships, steam-propelled vessels protected by iron or steel armor plates and far more powerful than all-wood ships of the line. These ships were constructed to establish control over the Adriatic Sea in the event of a conflict between the two countries.

The unification of much of Italy in this time period resulted in the amalgamation of the various navies of the former Italian states into the "Regia Marina" (Royal Navy). The Sardinian component included two ironclads, ordered from France in 1860, which became Italy's first broadside ironclads. The country quickly began a substantial construction program to bolster the "Regia Marina", as the Italians believed that a strong navy would play a crucial role in making the recently unified kingdom a great power.

These actions captured the attention of the Austrian Empire, which viewed Italy with great suspicion and worry, as irredentist claims by Italian nationalists were directed at key Austrian territories such as Venice, Trentino, and Trieste. In response to the growing strength of Sardinia—soon to be Italy—the Imperial Austrian Navy ordered two ironclads in 1860. This began a naval arms race between Austria and Italy, centered around the construction and acquisition of ironclads. This continued for the next six years, and by the time the war broke out between the two in 1866, Austria possessed seven ironclads to Italy's twelve.

While Italy emerged on the winning side of the war and acquired the Kingdom of Lombardy–Venetia under the terms of the Treaty of Vienna, the "Regia Marina" was decisively defeated at the Battle of Lissa by the much smaller Imperial Austrian Navy. Their poor performance led to a period of neglect with reduced naval budgets and a halt to new ship construction; Italy would not have another ironclad laid down until 1873.

Meanwhile, Austria reformed itself into the Austro-Hungarian Empire in 1867 after losing the Seven Weeks War to Prussia. In the years following the Battle of Lissa, Wilhelm von Tegetthoff would oversee the construction of three additional ironclads and the rebuilding of a fourth. After Tegetthoff's death in 1871, the Austro-Hungarian Navy entered its own period of neglect, with just five additional ironclads being constructed in the ensuing thirteen years. Both navies engaged in further construction projects throughout the 1870s and early 1880s, but the arms race ended in the 1880s due the signing of the Triple Alliance between Italy, Austria-Hungary, and Germany in 1882 and the introduction of new technologies that led to the development of pre-dreadnought battleships. Despite their alliance, however, Italy and Austria-Hungary would engage in a second naval arms race centered around the construction of battleships at the turn of the century. This arms race would continue until the beginning of World War I.

Within the Kingdom of Lombardy-Venetia, the revolution in Vienna sparked anti-Habsburg riots in the cities of Milan and Venice. Austrian Field Marshal Joseph Radetzky was unable to defeat the Venetian and Milanese insurgents in Lombardy-Venetia, and had to order his forces to evacuate western Italy, pulling his troops back to a chain of defensive fortresses between Milan and Venice known as the Quadrilatero. With Vienna itself in the middle of an uprising against the Habsburg Monarchy, the Austrian Empire appeared on the brink of collapse. On 23 March 1848, just one day after Radetzky was forced to retreat from Milan, The Kingdom of Sardinia sought to capitalize on the chaos engulfing the Austrian Empire and declared war, sparking the First Italian War of Independence.

After nearly driving Austrian forces out of the Italian peninsula altogether, fortunes turned for the Kingdom of Sardinia. The Papal States and the Kingdom of the Two Sicilies, who had initially allied with Sardinia against Austria, pulled out of the war, having barely participated in the fighting at all. Austrian reinforcements also bolstered Radetzky's forces in the Italian peninsula and following the Battle of Custoza, the tide of the war turned turned in Austria's favor. This victory was followed up by Sardinia's decisive defeat at the Battle of Novara in March 1849, which was followed by King Charles Albert of Sardinia abdicating the throne of Sardinia in favor of his son Victor Emmanuel II. The ensuing peace in August 1849 ended the war in an Austrian victory.

After the failure of the First Italian War of Independence, Sardinia began the search for potential allies. Sardinian Prime Minister Camillo Benso, Count of Cavour, found French Emperor Napoleon III supportive of an alliance with Sardinia following the Crimean War, in which France and Sardinia were allies against Russia. After the Plombières Agreement of 1858, Napoleon III and Cavour signed a secret treaty of alliance against Austria whereby France would assist Sardinia in return for Nice and Savoy being ceded to France. The Franco-Sardinian forces quickly defeated the Austrians during the spring of 1859 and after the Battle of Solferino, Austria ceded most of Lombardy and the city of Milan to France under the Treaty of Zürich, who transferred it to Sardinia in exchange for Savoy and Nice. During the war, Italian revolutionary Giuseppe Garibaldi would emerge as a leader for the unification of Italy. Garibaldi, initially supported a republican revolution to bring the peninsula together. However, he eventually concluded that only the Kingdom of Sardinia could unify the Italian states into one nation.

In 1860, uprisings in Messina and Palermo in the Kingdom of the Two Sicilies provided Garibaldi with an opportunity to begin the conquest of Southern Italy. He gathered about a thousand volunteers – called "i Mille" (the Thousand), or, as popularly known, the Redshirts – in two ships named "Il Piemonte" and "Il Lombardo", and left from Genoa on 5 May. On 11 May, Garibaldi and his forces landed at Marsala, on the westernmost point of Sicily. Garibaldi rapidly gained control of the island, declaring himself dictator of Sicily in the name of Victor Emmanuel II of Italy on 14 May.

After victories at Calatafimi, Palermo, and Milazzo, nearly the entire island was under Garibaldi's control by the end of July. On 19 August, his men disembarked in Calabria in anticipation of an offensive aimed at capturing Naples, capital of the Kingdom of the Two Sicilies. Troops from the Kingdom of the Two Sicilies defending Calabria offered little resistance, as several units of the Bourbon army disbanded or even joined Garibaldi's ranks. On 30 August a Sicilian army was officially disbanded at Soveria Mannelli, while only minor and dispersed units continued the fight. The Neapolitan fleet behaved in a similar way and offered little to no resistance against Garibaldi's forces. King Francis II of the Two Sicilies was thus forced to abandon Naples and entrench himself in the fortress of Gaeta, while a last stand was set up on the Volturno river, north of Naples. On 7 September, Garibaldi entered Naples and was hailed as a liberator by the city.

While Garibaldi conquered Southern Italy, the Kingdom of Sardinia invaded the Papal States, conquering most of Central Italy after the Battle of Castelfidardo. Sardinian troops then entered the Kingdom of Two Sicilies from the north and joined Garibaldi's forces. After the Battle of the Volturnus, the only organized Bourbon force left in Italy remained at Gaeta. On 21 October, a plebiscite confirmed the annexation of the Kingdom of the Two Sicilies to the Kingdom of Sardinia by an overwhelming majority, while on 26 October, Victor Emmanuel II and Garibaldi met at Teano in northern Campania, where Garibaldi shook Victor Emmanuel's hand and hailed him as "King of Italy". The last Bourbon stronghold at Gaeta finally surrendered after a long siege in February 1861. With the capture of Gaeta, a unified Kingdom of Italy was proclaimed on 17 March 1861. King Victor Emmanuel II of Savoy was then declared King Victor Emmanuel II of Italy.

In March 1860, Cavour became the Kingdom of Sardinia's naval minister. He assumed this role at a time when Sardinia was rapidly expanding into Northern and Central Italy. Earlier that month, plebiscites in Tuscany, Modena and Reggio, Parma, and Romagna produced overwhelming majorities in favor of annexation by Sardinia. This expansion of Sardinia likewise resulted in the growth of the kingdom's navy. In April, Cavour oversaw the incorporation of Tuscany's small fleet into the Sardinian Navy. Immediately after the Tuscan fleet had been integrated into the Sardinian Navy, Cavour placed an order with the Société Nouvelle des Forges et Chantiers de la Méditerranée to construct two armored warships in Toulon. These two ships would become the "Formidabile" class, the first ironclads to serve in the Italian Peninsula. While foreign powers such as Austria watched the growth of Sardinia and the expansion of its army closely, the consolidation of the Sardinian Navy after the incorporation of multiple states across the Italian Peninsula received far less attention. This allowed Cavour to continue his work incorporating the various fleets Sardinia inherited as more and more Italian states joined the growing kingdom.

Garibaldi's conquest of the Kingdom of Two Sicilies marked the beginning of the Sardinian Navy's transformation into the Italian Regia Marina. When the Italian revolutionary landed in Sicily in May 1860, only two steamships were at the disposal of his thousand volunteers. By the time Garibaldi had conquered the island, he had in his possession over 12 steam ships of various types which would later assist in transporting his army across the Strait of Messina to Southern Italy. These numbers were bolstered by the desertion of most of the Neapolitan Navy in July 1860 to Garibaldi's cause. Following Garibaldi's conquest of Naples in September, the remainder of the Neapolitan Navy was handed over to Carlo Pellion di Persano for incorporation into the Sardinia Navy.

The rest of Southern Italy fell in short order and in March 1861, the Kingdom of Italy was proclaimed. By this time, the vast majority of the former navies of the various Italian states had been brought into the Sardinian Navy. Two weeks after the establishment of the Kingdom of Italy, the Italian Regia Marina was created as a single unified naval force for the newly formed kingdom. Cavour immediately asked the Italian Chamber of Deputies for an unprecedented 20,000,000-lire budget to expand the Regia Marina beyond its newly acquired ships. The funds would also be used to construct additional ironclads as well as establish an Italian naval base at Ancona on the Adriatic Sea. The stage was thus set for the Italian ironclad program.

Even before the unification of Italy, the Imperial Austrian Navy had been undergoing its own expansion ever since the promotion of Archduke Ferdinand Maximilian of Austria (the future Emperor Maximilian I of Mexico) to the office of "Kontreadmiral" (Rear Admiral) and to the post of "Oberkommandant der Marine" (Commander-in-Chief of the Navy) in September 1854. At the age of 22, Ferdinand Max became the youngest "Oberkommandant" in the history of the Imperial Austrian Navy, being a year younger than when Archduke Friedrich of Austria assumed command of the navy ten years earlier. Despite his age and his lack of experience in battle or command on the high seas, Ferdinand Max was described by naval historian Lawrence Sondhaus as "the most gifted leader the navy had ever had, or ever would have." Ferdinand Max worked hard to separate the Imperial Austrian Navy from its dependence upon the Imperial Austrian Army, which had nominal control over its affairs. As the younger brother to Franz Joseph I, Ferdinand Max was given great freedom by the Emperor to manage the navy as he saw fit, especially with respect to the construction and acquisition of new warships.

Ferdinand Max immediately went to work expanding the Imperial Austrian Navy. Fears of over-dependence upon foreign shipyards to supply Austrian warships enabled him to convince his brother to authorize the construction of a new drydock at Pola, and the expansion of existing shipyards in Trieste. Furthermore, Ferdinand Max initiated an ambitious construction program in the ports of Pola, Trieste, and Venice, the largest the Adriatic had seen since the Napoleonic Wars. By 1855, a screw-powered ship-of-the-line was under construction in Pola after failed bids to construct the ship with British and American shipbuilding firms, while two screw-frigates and two screw-corvettes were being built in Trieste and Venice respectively.

By the spring of 1855, the Imperial Austrian Navy consisted of four frigates, four corvettes, and two paddle steamers in active service in the Mediterranean Sea. This would be the largest Austrian fleet since before the War of Austrian Succession over 100 years prior. Despite these efforts however, the Imperial Austrian Navy was still considerably smaller than its French, British, or Sardinian counterparts. Indeed, the Imperial Austrian Navy was still attempting to catch up to the technological developments which had emerged during the first half of the 19th century with respect to steam power, when the emergence of the French iron-plated floating battery "Dévastation" gained international attention following its use during the Crimean War in October 1855. "Dévastation" would signal the beginning of the emergence of ironclad warships over the course of the next decade.

Austria's defeat in the Second War of Italian Independence in 1859 marked the end of the Italian Peninsula being divided up among several independent states. As the Kingdom of Sardinia swiftly annexed the United Provinces of Central Italy in early 1860, the rapid growth of Sardinia's territory and armed forces quickly earned the attention of the Austrian government in Vienna. While Austrian Emperor Franz Joseph I ordered Austria's army to mobilize in anticipation of a potential Sardinian attack directed at Venice, little focus was given to the similar growth of the Sardinian Navy as it inherited the fleets of several Italian states.

When Garibaldi's conquest of the Kingdom of the Two Sicilies began in May 1860, the Austrian Empire responded by recalling its small fleet stationed in the Levant under the command of "Fregattenkapitän" (Captain) Wilhelm von Tegetthoff. "Kontreadmiral" (Rear Admiral) Bernhard von Wüllerstorf-Urbair then deployed the Imperial Austrian Navy to the waters off of Naples in order to prevent Garibaldi from attacking the city by sea. However, the defection of the Neapolitan Navy and Garibaldi's rapid advance up the Italian Peninsula after making landfall at Calabria rendered this fleet useless. The Austrian fleet was instead tasked with transporting King Francis II from Naples to Gaeta.

Sardinia's annexation of most of Central Italy in early 1860 had caused concern for the Austrian Empire, but the collapse of the Kingdom of the Two Sicilies in just a matter of months sparked a diplomatic and military crisis in Vienna. While Garibaldi finished his conquests, the Sardinian Army invaded the Papal States and the growing Sardinian Navy entered the Adriatic to blockade the port of Ancona. The Austrian Empire viewed Sardinian warships in the Adriatic as an overtly hostile act, and fears of Garibaldi continuing his military campaigns by attempting a landing in Istria or the Dalmatian Coast resulted in even greater alarm. The Austrian government knew these lands were deemed "Italia irredenta" (Unredeemed Italy) by revolutionaries such as Garibaldi, due to their historical ties with the former Venetian Republic. To make matters worse, Garibaldi had several hundred Hungarian volunteers in the ranks of his army. Vienna calculated that should a landing along the Austrian coastline by Garibaldi be successful, the whole southern and eastern portions of the country could potentially erupt into revolution, much like the revolutions in 1848 which nearly toppled the Austrian Empire altogether.

The Italian ironclad program began before there even was a "Kingdom of Italy". The first two ironclad warships in the Italian Peninsula, the "Formidabile"-class ironclads and, were ordered by Cavour in the spring of 1860, before Garibaldi had even landed in Sicily. The ships had originally been intended to serve as armored floating batteries, and their designs were thus based on the France's which had earned recognition at the Battle of Kinburn during the Crimean War. Despite these plans, the rapid expansion of the Kingdom of Sardinia and the subsequent unification of Italy resulted in the ships being converted into sea-going broadside ironclads. This change signaled the direction of Italian foreign and naval policy in the years immediately after the formation of the Kingdom of Italy, as the ships were aimed at defeating the Imperial Austrian Navy in open combat. Indeed, even after the unification of Italy and the establishment of a single Kingdom of Italy in 1861, many Italians believed the "Risorgimento" had not yet been complete, as the Austrian Empire still possessed several Italian-speaking territories, most notably Venice.

"Terribile" would be the first Italian ironclad to be commissioned into the Regia Marina, joining the fleet in September 1861. She was soon followed by her sister ship "Formidabile", which was commissioned in May 1862, the same month that Austria's first ironclad, "Salamander", would be commissioned into the Imperial Austrian Navy.

While Austria continued to refuse to grant diplomatic recognition of the newly formed Kingdom of Italy, it could not continue to ignore the threat the Regia Marina's own naval expansion program, under the direction of Cavour, posed to the Austrian coastline. In response to the assembly of the Italian "Formidabile" class, Archduke Ferdinand Max personally ordered the construction of the "Drache"-class ironclads at the end of 1860. These ships, constructed by a Trieste-based shipbuilding firm, would be the first ironclad warships of the Imperial Austrian Navy. Austria had considered constructing ironclads before the "Drache" class, but the expensive cost of British shipbuilding offers in December 1858 led to the offers being rejected by "Kontreadmiral" (Rear Admiral) Ludwig von Fautz. However, the emergence of Italy's own ironclad program led to these concerns being rendered irrelevant in the face of the threat the Regia Marina posed.

Ferdinand Max ordered the ships and their engines in December 1860 from domestic shipyards. This work was done before any formal approval for the project could be granted by Franz Joseph I, but in February 1861 the Emperor allowed the construction to proceed. Ten says later, the Emperor also privatized the Navale Adriatico shipyard, in order to increase private sector interest in Austria's emerging ironclad program.

When the first "Drache"-class ironclad, "Salamander", was commissioned into the Imperial Austrian Navy in May 1862, she was the most expensive warship ever constructed for the Imperial Austrian Navy. She and her sister ship "Drache" cost 2,300,000 Florins each, a staggering amount of money at the time, and over six times the cost of previous Austrian warships. Despite the expensive nature of the ships involved, and before either the Austrians or Italians had commissioned a single ship into their respective navies, plans were already being made in both countries to develop more ironclad warships, each to counter the naval strength of the other.

With the commissioning of the Austrian "Drache"-class ironclads, both the Austrian Empire and the Kingdom of Italy possessed at least one ironclad warship, with more on the way. Over the next five years, the ironclad arms race between the two countries would only grow, as each country worked to gain a naval advantage over the other. While the "Drache"-class ships were still under construction in Trieste, Ferdinand Max began work in securing the necessary funding to continue Austria's ironclad program.

In April 1861, the Archduke drew up his first plans for a modernized and armored Imperial Austrian Navy. In his submission to Emperor Franz Joseph I, he argued that nearly all of Austria's diplomatic and military challenges could be addressed by engaging in a large ironclad construction program. His proposal outlined a battle fleet of nine armored ironclads, with seven more warships to join the two "Drache"-class ships in the autumn of 1863. Ferdinand Max wrote that the recent technological revolution in naval affairs which had been caused by the emergence of ironclads provided for a clean slate in which the Imperial Austrian Navy could develop newer warships on the same scale and pace as the other Great Powers of Europe, as older wooden ships of any type or nationality had been rendered obsolete by the new armor-plated ships.

Ferdinand Max was also sure to include the diplomatic benefits of engaging in an ambitious ironclad construction program. He argued that constructing a further seven ironclads by 1863 would allow the Imperial Austrian Navy to possess a fleet one-third the size of the French Navy, considered one of the largest and strongest in the world. This new fleet would thus increase the value of any military alliance Austria were to make with the other European powers, and potentially end the diplomatic isolation that the Empire had been facing since the Crimean War. Furthermore, the need for Austria to construct these warships was urgent in the eyes of Ferdinand Max, as the Italian government was devoting substantial amounts of money to building ironclads for the Regia Marina.

While Ferdinand Max was laying out plans for Austria's ironclad program, the Regia Marina was already executing its own program. Following up on the construction of the "Formidabile" class with another order for more warships, Cavour met with New York shipbuilder William H. Webb in Turin in late 1860, and concluded a deal was made for his shipyard to construct two armored frigates, which would eventually become the ironclads and. Cavour's agreement with Webb was made a state secret, and it would not be until after his death in June 1861 that the contracts for the ships were signed by General Luigi Menabrea, who succeeded Cavour as head of the Regia Marina. "Re d'Italia" was the first ship of the class to be laid down in New York City in November 1861 and her sister ship "Re di Portogallo" followed in December.

News of the Italian project, which became public in August 1861, sparked panic in Vienna. Just four months earlier, the Austrian Reichsrat had rejected Ferdinand Max's naval expansion program, only allocating the Archduke 6,000,000 Florins to run the Imperial Austrian Navy in 1862. The following month, Ferdinand Max briefed the Austrian Council of Ministers in Vienna on the Italian naval expansion. He told the council the Imperial Austrian Navy needed a budget of 15,100,000 Florins for the year 1862, over twice what had been allocated earlier that year. Ferdinand Max argued that the additional funds were needed to construct three more ironclads in short order, lest Austria fall behind its Italian neighbor. The Archduke's modified ironclad program would give the Austrian Empire a navy he believed would be capable of defeating the Regia Marina by the summer of 1862. Despite objections from the Austrian Finance, State, and Foreign Ministries, Emperor Franz Joseph I approved the program in October.

Construction of Austria's second class of ironclads thus began in October 1861 by Stabilimento Tecnico Triestino. Again designed by Romako, the ironclads,, and were all intended to be improvements over the previous "Drache" class. Each ship was designed by Romako to be larger with more powerful engines and carry a larger gun battery than their predecessors. Having encountered political opposition from the Austrian Reichsrat earlier in the year when he requested for additional funds, Ferdinand Max attempted to grow political support for the construction of future ironclads by purchasing some of the armor plating from a rolling mill in Celje owned by Reichsrat member Johann von Putzer. The Henckel von Donnersmarck Zeltweg works were likewise contracted to deliver armor plates for the ironclads, as were the same French firms which had provided the armor for the "Drache" class. Once more, the same subterfuge was employed to obtain the French-made plates and armored ram bows for the warships. These efforts proved to be far easier for Austrian agents based in Geneva than before, due to the growth in arms trafficking which followed the outbreak of the American Civil War. Indeed, the Austrians merely had to pose as Union or Confederate agents in order to avoid detection.

In order to address the gap between naval expenditures and construction plans with the will of the Reichsrat, which had rejected Ferdinand Max's ambitious proposals the year before, Emperor Franz Joseph I accepted a proposal from War Minister Count August von Degenfeld to convene a special commission to look at the role of the Imperial Austrian Navy in Austrian foreign and military policy. The commission would also examine the various proposals for the direction of the navy, to include Ferdinand Max's ironclad project. The Emperor convened this commission in February. The key question Franz Joseph I asked the commission was whether or not it was essential to maintain the Imperial Austrian Navy in order for Austria to remain a Great Power in Europe, if it was necessary for the navy to expand to the same size as the Regia Marina, and whether or not it the navy should transition towards prioritizing coastal defense, as opposed to wrestling control of the Adriatic or Mediterranean Seas from Italy in the event of war.

At the commission's meeting in March 1862, Degenfeld disagreed with Möring's analysis and declared that it was imperative for the Imperial Austrian Navy possess an ironclad fleet as powerful as the Regia Marina. Matthais von Wickenburg, the recently appointed naval minister, argued strongly that Ferdinand Max's ironclad construction proposals were essential to protecting Austria's growing merchant marine, and that ignoring Austria's seaborne trade by favoring coastal defense would harm the Austrian economy. Despite these arguments, Austrian Foreign Minister Johann von Rechberg strongly opposed the construction of any further ironclads, arguing along the same lines as Möring that "Austria is a land power, whose fate in case of war will be determined on land."

Rechberg began the commission's second meeting by attacking Ferdinand Max's proposal on financial grounds, arguing that the Imperial Austrian Navy had drastically overstepped financial allotments over the past decade, with the navy consistently overspending the monetary limits placed upon it under the Navy Law of 1850. These arguments were rebutted by Wickenbug and Degenfeld on the grounds that the Navy Law of 1850 had been amended in 1858, and that the large technological advancements which had played out since the First War of Italian Independence had likewise necessitated larger naval spending, as ironclads were far more expensive than traditional wooden ships. Arguments against expanding the navy on the grounds that allocating additional funds for constructing new ironclads may negatively effect the Imperial Austrian Army were rejected by the members, and by a vote of six to five the commission voted to support the goal of maintaining an Imperial Austrian Navy that would be as large as the Italian Regia Marina. The commission had voted in favor of adopting most of Ferdinand Max's ironclad program, but only by a narrow margin, still placing the future of the Austrian ironclad program in doubt.

The death of Italian Prime Minister Cavour in June 1861 was a major setback for the development of the Italian Regia Marina. While Menabrea, the new head of the navy, had secured the deal Cavour had worked on for the "Re d'Italia"-class ironclads to be constructed in New York City, he did not personally believe in the value of the warships and worked to undo the agreement almost as soon as he had signed it. Indeed, Menabrea doubted the value of armored warships altogether, and in the months after Cavour's death, he attempted to redirect the Regia Marina away from ironclad construction for its warships and more towards traditional wooden designs. Menabrea was supported in his skepticism by Nino Bixio, a veteran and key organizer of Garibaldi's Expedition of the Thousand, who had previously served in the Sardinian Navy prior to the unification of Italy. They found opposition in Vice-Admiral Persano, who had won recognition for his efforts in blockading Ancona and Gaeta during Garibaldi's conquest of the Kingdom of the Two Sicilies and the Sardinian invasion of the Papal States which followed.

Similar to their Austrian counterparts who were debating the practicality and usefulness of an ironclad battle fleet, in the autumn of 1861, Menabrea convened a naval commission intended to examine the state of the Regia Marina and determine the value of continuing the construction of ironclad warships. The commission immediately concluded that the Regia Marina needed to be as large as the combined navies of the Kingdom of Spain and the Austrian Empire. Italian worries over a potential Austro-Spanish alliance directed at dismembering the recently unified Kingdom of Italy and restoring the historical influence both nations had enjoyed over the Italian Peninsula in past centuries, though ultimately unfounded, caused much concern among the Italian naval officer corps. This fear was caused in part by the hostile reaction of the Spanish government after the declaration of the Kingdom of Italy. The Spanish, ruled by the House of Bourbon-Anjou, were among the first nations to condemn the invasion and annexation of the Kingdom of the Two Sicilies, and had joined Austria in withholding diplomatic recognition of both the unified kingdom and Victor Emmanuel's claim to the title of King of Italy.

In April 1862, news from across the Atlantic Ocean of the Battle of Hampton Roads reached both Italy and Austria. On 8 March 1862, the Confederate ironclad attacked the Union blockade fleet anchored in Hampton Roads. In the ensuing battle, "Virginia" sank the sailing frigates and. The next day, "Virginia" engaged the Union armored turret ship, and the two ironclads fought one another to a standstill.

The battle was be the first ever engagement between ironclad warships, and the difference between the first day of the battle when "Virginia" easily destroyed two wooden frigates, compared to the draw in her battle with the ironclad "Monitor" the following day, left an impression on most of the major navies in the world. Indeed, the battle received worldwide attention. The preeminent naval powers, the United Kingdom and France, halted further construction of wooden-hulled ships after receiving reports of the battle. The use of a small number of very heavy guns, mounted so that they could fire in all directions was first demonstrated by "Monitor" but soon became standard in warships of all types. Shipbuilders also incorporated rams like the kind employed by "Virginia" into the designs of warship hulls around the world. Within Austria and Italy, the Battle of Hampton Roads would prove to have a decisive impact on the course of the Austro-Italian ironclad arms race, influencing both nations' decision to continue with their ironclad programs and effectively resulting in the abandonment of wooden vessels forever.

In Austria, the results of the battle were so decisive that Rechberg reversed his opinion completely upon learning of the engagement, and asked the Reichsrat to approve all the new naval expenditures Ferdinand Max had been calling for. In June, the Austrian Reichsrat approved Archduke Ferdinand Max's budget, but directed the "Oberkommandant der Marine" to cut expenditures not related to training, naval construction and ship maintenance. The Reichsrat also ordered Ferdinand Max to purchase more coal from domestic sources, and to only rarely send warships out beyond the Mediterranean Sea. For 1863, the Imperial Austrian Navy was allocated some 8,900,000 Florins, a huge sum and far higher than previous budget outlays for naval affairs, but this was below the 10,900,000 Florins that Ferdinand Max had originally asked for. In compensation however, Wickenburg was able to acquire a further 4,000,000 Florins from the Reichsrat for the navy's 1862 budget. In November, the bill was approved and the Imperial Austrian Navy received its largest budget in history.

In Italy, the new Italian government convened on 7 March 1862, just one day before the "Virginia" wreaked havoc on the Union's unarmored warships. When news of the battle reached the Italian government, Persano addressed the Chamber of Deputies about the battle and argued Menabrea's proposed four ships-of-the-line were technologically obsolete, and that Regia Marina instead needed to acquire additional ironclads. Persano's plan included purchasing four ironclads from French shipyards, and constructing three additional ironclads domestically. This proposal was further revised in June, when Persano addressed the Chamber of Deputies and shared his support for incorporating Menabrea's earlier plan to purchase two ironclads from British shipyards, bringing the total number of proposed ironclads the Regia Marina would construct or purchase by 1865 to nine.

One week after presenting his ironclad plan to the Chamber of Deputies, Persano obtained approval from Prime Minister Rattazzi's cabinet to proceed. Soon after, Persano signed contracts for four ironclads to begin construction in French shipyards. These ships would ultimately form the. All four ships were designed by French naval architects, but three different shipyards were used to construct them, with and both being constructed at the Société Nouvelle des Forges et Chantiers de la Méditerranée shipyard in La Seyne, while and were constructed at the Gouin et Guibert shipyard in St. Nazaire, and the Arman Brothers shipyard in Bordeaux, respectively.

In October 1862, Persano also placed an order with the British shipyard Mare of Millwall, London, for an armored steam ram. Designed by Italian naval officer Simone Antonio Saint-Bon, financial problems related to the construction of the ironclad resulted in the order being transferred to the shipyard Harrison, also located in Millwall. Saint-Bon had originally intended the ship to be unarmed, relying only on its ram to sink enemy ships, but Harrison engineers revised the plan to include two large-caliber guns. While based on the design of USS "Monitor", the Italians intended to have two turrets as opposed to one. She would become the most expensive warship the Regia Marina had ever ordered at the time. Indeed, the costs to construct the ironclad were so high that Persano had to substitute the two British-built ironclads Menabrea had initially proposed and which he had supported, for this single warship.

In early 1863, Persano also went to work constructing a class of domestically-built ironclads. Shortly after negotiating contracts for French and British-built ships, orders for two ironclads were placed with Cantiere della Foce in Genoa. These two ships, and, were only the second class of ironclad warships to be domestically constructed in Italy. By the time construction on the ships would begin in February 1863, foreign navies had begun to experiment with the central battery ships, a design which discarded the usual broadside arrangement in favor of a shorter battery located amidships. This allowed the "Roma"-class ships to use a significantly shorter and much lighter section of side armor to protect the guns of each ship, which in turn permitted the carrying of heavier, more powerful guns.

As a result of Persano's work, by the spring of 1863 the Regia Marina had over a dozen ironclads under contract or under construction, though only the first two ships built during Cavour's tenure as Prime Minister had actually been completed.

The Austrian naval budget of 1862 would prove to be the largest such outlay the Imperial Austrian Navy would receive until 1900. Even so, the 1863 budget of only 8,900,000 Florins was far less than what Archduke Ferdinand Max had hoped for. This limited his ability to construct additional ironclads, having to scrap the third planned ship for the "Erzherzog Ferdinand Max" class. Ferdinand Max ran into even more financial issues when his plans to convert the ship-of-the-line had to be delayed due to a lack of funds. As a result, Austria was only able to construct seven ironclads between 1860 and 1865, as opposed to the nine Ferdinand Max had previously advocated for to the Austrian Reichsrat in April 1861.

In a bid to maintain the navy's finances in the face of potential budget cuts, Ferdinand Max attempted to cut expenditures in nearly every aspect of the Imperial Austrian Navy outside of ironclad construction. Patrols conducted by the Imperial Austrian Navy were severely curtailed, and warships rarely left the Mediterranean Sea. Indeed, with the exception of Tegetthoff's patrol off the coast of Greece to protect Austrian interests in the Balkan kingdom during Greece's constitutional crisis between 1862 and 1863, Austrian warships hardly ever ventured out beyond the Adriatic Sea. The smaller Austrian naval budgets also forced Ferdinand Max to reluctantly turn down proposals from foreign shipbuilders to construct additional ironclad warships for the Imperial Austrian Navy. Among those whose offers the Archduke had to reject for a lack of funds were American shipbuilder John Ericsson, the designer of USS "Monitor", and the Arman Brothers shipyard in Bordeaux, which was constructing the Italian ironclad "Ancona".

Further attempts to purchase ironclads from British shipyards which had been constructing them for the Confederacy in late 1863 failed as well, due to the sheer costs of the warships involved. Despite an increase in funds under the 1864 budget to some 12,100,000 Florins, none of the money the Reichsrat had allocated to the Imperial Austrian Navy were earmarked for ironclad construction or purchases, leaving Ferdinand Max with the same seven ironclads as before. Faced with political gridlock and having been offered the throne of the Second Mexican Empire in October 1863, Archduke Ferdinand Max resigned his post as "Oberkommandant der Marine" in early 1864 before sailing to Mexico aboard the frigate to become Emperor Maximilian I of Mexico.

In the years after Ferdinand Max's departure from Austria, the Imperial Austrian Navy suffered under further political and budgetary constraints. In April 1864, it was proposed that the naval ministry, which the former Archduke had helped to establish, be disbanded. In January 1865, Emperor Franz Joseph I dissolved the ministry and the Imperial Austrian Navy was again placed under the jurisdiction of the Austrian Ministry of War. Under the 1865 budget, just 7,100,000 Florins were allocated towards naval expenses, but once more, none of the funds were designated for warship construction. In 1866, the naval budget grew slightly to 7,800,000 Florins, but for the third consecutive year there would be no funds for additional ironclads, or other warships. Thus, when the Seven Weeks War began in June 1866, the Imperial Austrian Navy would possess only ships which had been constructed during Ferdinand Max's tenure as "Oberkommandant der Marine".

Cugia inherited a Regia Marina rapidly growing in size and quickly acquiring ironclad warships. Support among the general public and the Regia Marina's officer corps for expanding the navy and constructing new ironclads remained high, with a new naval commission even going so far as to call for a massive battle fleet of 40 ironclads. Additionally, previous opponents of ironclad warships such as Bixio, had since been convinced of their importance following the Battle of Hampton Roads. Indeed, Bixio subsequently became one of the most vocal supporters of Italy's ironclad program after having previously opposed the concept during Persano's years as head of the Ministry of the Navy.

Italian Naval Budgets: 1861–1865
Cugia attempted to carry on the work which began under Cavour and had continued under Persano. In addition to ordering additional transports, shallow-draft gunboats which could be used to seize Venice by sea, Cugia also ordered yet another class of Italian ironclads, named the. The first ship of the class,, was laid down at the Arsenale di La Spezia in August 1865. She was followed by, which was laid down the same month by Regio Cantiere di Castellammare di Stabia. The design for "Principe Amedeo" was prepared by Inspector Engineer Giuseppe De Luca. He had initially planned on using entirely wooden hulls for the ships, but had changed to composite wood and iron construction by the time the ships were laid down. The two ships were also the last Italian ironclads to feature sailing rigs and wooden hulls.

By the time discussions were underway regarding the "Principe Amedeo" class, the Regia Marina had already acquired the French-built armored frigates of the "Formidabile" class, and two more vessels of the "Re d'Italia" class were under construction in the United States. The ironclad "Affondatore" had also been ordered in the United Kingdom, while the four ships of the "Regina Maria Pia" class were under construction in French shipyards. Furthermore, three wooden steam frigates of the "Principe di Carignano" class, already under construction, were being converted into armored ships, and two more ironclads of the "Roma" class had been ordered from Italian shipyards. This meant the two new ships of the "Principe Amedeo" class would bring the Regia Marina's total number of ironclads to 16 ships.

The "Principe Amedeo" class would be the last two ships of this first generation of Italian ironclads however. The sheer number of ironclads the Regia Marina was constructing and ordering, combined with the relatively short time-span in which Italy had engaged in its ironclad build up, was beginning to place a severe strain on the newly unified Kingdom's finances. The dependence on foreign shipyards to construct many of the ironclads also helped to drastically raise costs, already high to begin with, even further. By 1865, Italian naval expenditures began to drastically outpace the budgetary outlays the Chamber of Deputies had authorized for the Regia Marina. Despite the fact that the Italian government had allocated larger naval budgets than their Austrian counterparts for every year between 1861 and 1865, for the first four years of its existence, the Regia Marina consistently spent million of lira more than what the Chamber of Deputies had authorized it. Indeed, the Regia Marina exceeded its budget by roughly 75,000,000 lira between 1861 and 1865.

Italy once again had a turnover in Prime Ministers following public backlash over the September Convention of 1864. Minghetti was ousted and Alfonso Ferrero La Marmora succeeded him on 28 September 1864. La Marmora's first objective as prime minister was to cut government expenditures and finally balance the Italian budget. After appointing General Diego Angioletti to the office of Minister of the Navy, La Marmora worked the shrink the size of the Regia Marina's budget, and bring the era of overspending budgetary outlays to an end. Using Spain's decision to finally recognize the Kingdom of Italy as a catalyst to begin debates over the size of the naval budget, La Marmora argued before the Chamber of Deputies that the Regia Marina possessed or had under construction more than enough warships of all types, including ironclads, to defeat the Imperial Austrian Navy in battle. Despite strong opposition from Persano, Cugia, and Bixio, La Marmora's government began to reduce naval expenditures and ended further ironclad purchases and construction projects for the time being. The government would instead focus on completing ships already under construction or under contract in the lead up to the Seven Weeks War.

Austria's attention was drawn away from Italy at a time when it appeared the ironclad arms race between the two nations was fading. In late 1863, the Schleswig-Holstein Question once again captured the attention of most of the German Confederation after Christian IX of Denmark became King of Denmark and Duke of Schleswig and Holstein. He declared the Duchy of Schleswig an integral part of Denmark in a violation of the London Protocol of 1852, which emphasized the status of the Kingdom of Denmark as distinct from the independent Duchies of Schleswig and Holstein. The annexation of the largely German populations of Schleswig and Holstein gave the German Confederation a "casus belli" to use against Denmark, and the Second Schleswig War began when Prussian and Austrian troops crossed the border into Schleswig in February 1864. After eight months of fighting, the Danes were defeated and the two nations won control of Schleswig and Holstein in the Peace of Vienna.

The Peace of Vienna was not to last however. Shortly after concluding the Second Schleswig War, Minister President of Prussia Otto von Bismarck began to lay the foundations for diplomatically isolating Austria and giving Prussia the opportunity to settle the German Question once and for all by force of arms. In April 1866, the Prussian government signed a secret agreement with Italy, committing each state to assist the other in a war against Austria. On 14 June, the Seven Weeks War began when Prussia attacked Austria's allies in the German Confederation.

Nevertheless, Italy's ironclad advantage of 12 to 7, led to great expectations. Nino Bixio, who had previously opposed the concept of ironclads only to enthusiastically endorse their acquisition by the Kingdom of Italy following the Battle of Hampton Roads, described the Regia Marina as "Incontestably superior" to the Imperial Austrian Navy. These sentiments were shared by the Italian public, the Chamber of Deputies, and the Regia Marina itself. A quick victory over the Imperial Austrian Navy was expected, to be followed by Italian naval dominance over both the Mediterranean and Adriatic Seas.

La Marmora resigned as Prime Minister on 17 June in order to become King Victor Emmanuel II's chief-of-staff. Angiolette likewise resigned as Minister of the Navy in order to be given a command with the Italian army, which was expected to see the bulk of the fighting with Austria. Their replacements, Bettino Ricasoli as Prime Minister and Agostino Depretis as Minister of the Navy, set out to secure Italian dominance over the Adriatic. Shortly after Italy declared war on Austria on 20 June, Ricasoil laid out plans for Italy's annexation of Venice, Trentino, Trieste, the Dalmatian Coast, Istria, and Fiume. Depretis strongly believed the Regia Marina was strong enough to secure these conquests. On 25 June, the Regia Marina's main battle fleet, led by Persano, made port at Ancona in anticipation of engaging the Imperial Austrian Navy in the Adriatic.

Meanwhile, the Austrian ironclad "Drache" engaged the coastal defense ship with concentrated broadsides, including hot shot, which started a serious fire aboard "Palestro". The latter attempted to withdraw, and was able to use her superior speed to escape from "Drache". Left without her original target, "Drache" turned to fire at "Re d'Italia" along with several other Austrian vessels. One of them disabled the Italian ironclad's rudder, leaving her incapable of maneuvering. In the ensuing firefight however, "Drache" was hit several times; one shell struck her commander, Captain Moll Heinrich von Moll, in the head, killing him instantly.

"Re d'Italia"s disabled rudder presented another opportunity for Tegetthoff to ram the vessel at full speed. After two collisions which occurred at angles too oblique to inflict serious damage, "Erzherzog Ferdinand Max" struck the Italian ship directly. "Erzherzog Ferdinand Max"s ram tore a gaping hole in "Re d'Italia"s hull on the port side below the ship's waterline, though the Austrian ironclad sustained no significant damage herself. Tegetthoff reversed course, allowing the Italian ironclad to lurch back to port and quickly sink. He initially ordered his crew to lower boats to pick up the Italians struggling in the water, but the Italian ironclad "San Martino" was approaching, and he could not allow his ship to become a stationary target. Instead, he ordered the aviso to remain behind and pick up the survivors while "Erzherzog Ferdinand Max" engaged "San Martino". The other Italian ships, however, did not realize "Kaiserin Elizabeth" was attempting to pick up the Italian survivors, and so opened fire on her, driving her away from the men in the water.

While the melee continued, the Austrian ironclad "Don Juan d'Austria" initially attempted to follow Tegetthoff in his second pass, but quickly lost contact with Tegetthoff's flagship in the chaos. Italian ironclads surrounded the Austrian ship, forcing the ironclad "Kaiser Max" to come to her aid. Thereafter, "Re di Portogallo" and the Austrian ironclads exchanged broadsides for around half an hour before the Austrians engaged "Affondatore". The latter scored three hits on "Don Juan d'Austria"s unarmored bow, but these shots caused little damage. The melee which followed Tegetthoff's second pass was to his advantage, as the Austrian commander wished to rely upon ramming tactics in order to compensate for the Regia Marina's advantage in ironclads and the Imperial Austrian Navy's inferior guns. Indeed, the ensuing melee was so chaotic that the Italian ironclad "Regina Maria Pia" collided with her sister ship "San Martino", damaging the latter's ram bow. The melee further hampered Italian efforts to use their superior numbers against the Austrians when the ironclad "Ancona" became entangled with the coastal defense ship "Varese", allowing a group of Austrian wooden ships to escape the engagement unharmed.

By this time, "Palestro" was burning badly from her engagement with "Drache" and from 15 broadsides fired by "Kaiser Max", and was soon destroyed by a magazine explosion. Persano broke off the engagement, having lost two ships, and though his squadron still outnumbered the Austrians, he refused to counter-attack with his badly demoralized forces. In addition, the fleet was low on coal and ammunition. The Italian fleet began to withdraw, followed by the Austrians; Tegetthoff, having gotten the better of the action, kept his distance so as not to risk his success. Additionally, the Austrian ships were slower than their Italian counterparts, and so they could not force a second engagement. As night began to fall, the opposing fleets disengaged completely, heading for Ancona and Pola, respectively. In the course of the battle, the Imperial Austrian Navy only suffered 38 killed, compared to the 612 dead among the ranks of the Regia Marina.

The day after the Battle of Lissa, Tegetthoff was promoted by Emperor Franz Joseph I to the rank of vice admiral. Meanwhile, Admiral Persano claimed Lissa was an Italian victory despite the Italians losing two ironclads and failing to sink or capture a single Austrian ship. Shortly after returning to Ancona with his fleet on 21 July however, Persano saw his story fall apart as the truth about the battle's results swiftly turned public opinion about the conduct of the Regia Marina against the Italian commander. As an Italian Senator, Persano saw the Senate of the Kingdom of Italy place him on political trial in April 1867 and ultimately forced the admiral to retire in disgrace.

Despite the Austrian victory at Lissa, the Seven Weeks War would ultimately be decided on land. The decisive Battle of Königgrätz had occurred earlier in the month, resulting in heavy Austrian casualties and signaling Prussia's eventual victory over Austria in the war. Just six days after the Battle of Lissa, Austria and Prussia signed a preliminary peace agreement at Nikolsburg. With Austrian dominance of the Adriatic Sea confirmed, and with reinforcements arriving on the Italian front from Germany, Austria's negotiating position with the Italians improved significantly and Italy was thus forced to sign the Armistice of Cormons on 12 August. Under the terms of the subsequent Treaty of Vienna, signed on 12 October, Italy gained possession of Venetia, but nothing else from the Austrian Empire.

The battle of Lissa proved to be the climax of the Austro-Italian ironclad arms race, though the naval competition between the two nations would continue for another 16 years. Following the signing of the Treaty of Vienna, Austria was diplomatically isolated which caused a considerable amount of uncertainty over the future of its naval forces. Tegetthoff however was widely praised for his performance at Lissa. In addition to being promoted and receiving the Military Order of Maria Theresa on behalf of the Austrian Empire, Emperor Maximilian I of Mexico, who had overseen the construction of Austria's entire ironclad fleet as Archduke Ferdinand Max, congratulated Tegetthoff for his victory and awarded the Austrian vice admiral the "Grand Cross of the Imperial Order of Our Lady of Guadalupe", the highest Imperial Order that could be bestowed by the Mexican Emperor.

Despite its relatively limited impact on the outcome of the Seven Weeks War, the Battle of Lissa would prove to have a major impact on the development of naval warfare for the next 60 years. As the first naval engagement between multiple armored warships in history, the Battle of Lissa would be the largest fleet engagement to occur in the century between the Battle of Trafalgar and the Battle of Tsushima. Most of the world's major navies adopted Tegetthoff's ramming tactics and subsequently incorporated ram bows onto warships well into the 1920s.

In the years after the Battle of Lissa, the Regia Marina fell into an era of steep decline. Having already having overspent its naval budgets by millions of lira in the years before Lissa, the Regia Marina saw its budget cut throughout the 1860s and 1870s. With Austrian control over the Adriatic Sea solidified following the Seven Weeks War, it entered the post-war era in a state of political and financial disarray as most of the Regia Marina's leadership, including Persano, had been disgraced by the Battle of Lissa and the failure to achieve any naval gains in the Adriatic.

In the autumn of 1867, Menabrea, who had previously been the primary objector to the construction of Italy's ironclad battle fleet after Cavour's death in 1861, came to power as Prime Minister of Italy. Meanbrea continued his record of opposing ironclad warships and scrapped all plans to construct new ships which had not already been ordered shortly after taking office. These events caused construction of new ironclad warships to come to a halt after the competition of the "Principe Amedeo" class. Italy did not lay down another ironclad until 1873.

Austria's defeat in the Seven Weeks War forced Austria to determine a new set of foreign and domestic policies for the future, as Austria's interests since the days of the Holy Roman Empire had primarily been found in Italy and Germany. The Empire thus reformed itself into the Austria-Hungarian Empire following the adoption of the Austro-Hungarian Compromise of 1867 (German: "Ausgleich"), which re-established the sovereignty of the Kingdom of Hungary and placed Hungarians within the Empire on an equal footing with Austrians. Under the "Ausgleich", Emperor Franz Joseph I would be crowned as King of Hungary, while a separate parliament at Pest with powers to enact laws for the lands of the Holy Crown of Hungary would be established.

From 1867 onwards, the abbreviations heading the names of official institutions in Austria-Hungary reflected their responsibility: (German: "" or Imperial and Royal) was the label for institutions common to both parts of the Monarchy. This meant that following the transformation of the Austrian Empire into the Austro-Hungarian Empire, the Imperial Austrian Navy was itself reformed into the Imperial and Royal Navy (German: "kaiserliche und königliche Kriegsmarine"), though the navy was commonly referred to either as the "k.u.k. Kriegsmarine" or simply the "Austro-Hungarian Navy".

Seizing upon the decline of the Regia Marina in the years immediately after the Battle of Lissa, Tegetthoff worked to continue the efforts of Archduke Ferdinand Max of expanding the ironclad fleet of the now Austro-Hungarian Navy. Tegetthoff found political allies in the Austro-Hungarian Minister of War Carl von Franck and retired Admiral Bernhard von Wüllerstorf-Urbair. Wüllerstorf's and Franck's primary arguments in favor of continuing with the ironclad program Austria had engaged in prior to the Seven Weeks War lay largely along economic grounds. The two believed that constructing new ironclad warships would rejuvenate Austria-Hungary's economy following the defeat at the hands of Prussia and Italy, and that such a fleet would help to open up new commercial opportunities in the Levant and the Middle East. These proposals would be shelved however while Austria continued to reel from the military defeats inflicted by Prussia, and several cabinet reshufflings by Emperor Franz Joseph I resulted in a government more interested in pursuing revenge against Prussia than constructing new ironclads, which would be of little use in a hypothetical second war with Prussia.

Nevertheless, in the first budget passed following the "Ausgleich", funds were appropriated to renovate and upgrade Austria-Hungary's oldest ironclads, "Drache" and "Salamander". Additional funds were set aside to re-arm the entire fleet with new RML guns from the United Kingdom. Furthermore, the first post-war ironclad of the Austro-Hungary Navy,, was laid down at the Stabilimento Tecnico Triestino shipyard in San Marco in June 1867. As part of the post-"Ausgleich" reforms, Austria-Hungary attempted to court France and Italy as potential allies to curb future Prussian expansion. This potential alliance and a re-orientation of Austro-Hungarian foreign policy back towards Germany threatened the development of the Austro-Hungarian Navy and thus the construction of additional ironclads, though the talks ultimately failed after France and Italy could not agree on the Roman Question.

Tegetthoff followed up on this progress with a new proposal for the 1870 budget, which would establish fixed annual budgets similar to the German Naval Laws that German Secretary of State for the Navy, Alfred von Tirpitz, would establish near the turn of the century. This time however, Tegetthoff emerged from the political debates in Vienna and Pest with only a partial victory. While the Austro-Hungarian Navy's 1870 budget was increased to 9,800,000 Florins, the delegations rejected the "Marinekommandant"s proposal for a fixed naval budget, and no additional funds were allocated for new ironclads. These budgetary restraints would result in "Erzherzog Albrecht" being built to a slightly smaller design than "Custoza". Nevertheless, in the four years since the Battle of Lissa, the Austro-Hungarian Navy had begun work on three new ironclads, and the older ship-of-the-line "Kaiser" had been converted into a casemate ironclad.

While Tegetthoff spent most of 1870 observing the Franco-Prussian War and securing funds to rush completion of the ironclads already under construction, the new ironclads Austria-Hungary was constructing had begun to bring Tegetthoff close to his ambitious goal of 15 armored warships by 1878. However, after obtaining new funds in January 1871 to speed up the acquisition of the British-made armor plating of "Custoza" and "Erzherzog Albrecht", Tegetthoff's health failed rapidly. Catching pneumonia after walking home in a rainstorm, Tegetthoff died in April 1871. His death would also mark a period of substantial decline for the Austro-Hungarian Navy, as Europe's changing political outlook in the face of the recently concluded Franco-Prussian War, combined with improved Austro-Italian relations in the decade to come, severely undermined future arguments for the expansion of the Austro-Hungarian Navy.

Tegetthoff's successor to the office of "Marinekommandant" was his old political rival, Friedrich von Pöck. While he commanded the ship-of-the-line "Kaiser" in the Second Schleswig War, Pöck had been given shore assignments throughout the Seven Weeks War, denying him the same sort of fame and public admiration that Tegetthoff had enjoyed after the Battle of Lissa. Almost immediately after taking office, Pöck faced chronic budgetary problems, owing in large part due to obstructionism from Hungarians and liberal Germans within the Austro-Hungarian government, the former viewing naval matters as an Austrian concern, and the latter opposed to naval expansion in light of the continued deterioration of the Regia Marina following the Battle of Lissa. Additionally, since he was not involved in Tegetthoff's victory at the Battle of Lissa, he lacked the personal prestige to command the respect of the government, which Tegetthoff had successfully used to secure the construction of four ironclads in the four years since the Seven Weeks War. As a result, Pöck had great difficulty securing the funding for new ironclad warships during his tenure.

Pöck finally won approval for a new ironclad,, in 1875 but he could not convince the delegations to allocate funds for a sister ship he had planned to name "Erzherzog Karl". "Tegetthoff" was laid down in April 1876, the only ironclad to be constructed for the next eight years. Confronted with an unwillingness within the Austro-Hungarian government to strengthen the fleet further, Pöck resorted to subterfuge to acquire the funds he needed. In 1875, he asked for a budget increase to "rebuild" the three elderly "Kaiser Max"-class ironclads. In fact, Pöck sold the old ships for scrap, reusing only their machinery, armor plates, and other fittings for the construction of three new ships, which were given the same names to obscure his sleight of hand.

Austro-Hungarian Naval Budgets: 1867–1884
Throughout this period, the navy's annual budget continued to fall, from a peak of 11,100,000 Florins in 1872 to 8,500,000 Florins in 1880. Pöck continued to push for another new ironclad, but by 1880 his efforts were only symbolic: in his proposed budget estimates for the year, he included a new ironclad warship, but did not actually allocate any funds for it. Unable to increase the strength of the ironclad fleet, Pöck turned to less expensive means to defend Austria-Hungary's coastline, including development of naval mines and self-propelled torpedoes. He ordered the first torpedo boat, "Torpedoboot I", from Britain in 1875, followed by five more from Britain and four more from domestic shipyards thereafter. In the late 1870s and early 1880s, he also ordered the four torpedo cruisers,,, and.

These new orders marked not only a change in Austro-Hungarian naval policy, but also the end of the Empire's participation in the ironclad arms race, though two final ironclads would be built in 1884. Pöck succeeded in securing funding for the first of these two ships in 1881, having obtained authorization for to replace the aging ironclad "Salamander". The design for the new ship was prepared by Josef Kuchinka, the Director of Naval Construction and Romako's successor to the post. "Kronprinz Erzherzog Rudolf" was laid down in January 1884.

A second ironclad and Austria-Hungary's last,, was authorized shortly thereafter by Pöck's successor, Maximilian Daublebsky von Sterneck. Sterneck ultimately had to resort to the same budgetary tricks employed earlier by Pöck in order to construct "Kronprinzessin Erzherzogin Stephanie". She was laid down in November 1884 using funds that had been allocated to modernize the ironclad "Erzherzog Ferdinand Max". Sterneck attempted to conceal the deception by referring to the ship officially as "Ferdinand Max", though the actual "Ferdinand Max" was still anchored in Pola as a school ship. Eventually the "fait accompli" of the ironclad's construction was accepted by the delegations and the new ship was commissioned under the name "Kronprinzessin Erzherzogin Stephanie" in July 1889. After the construction of these two final ironclads, nearly another decade would pass before the Austro-Hungarian Navy secured funding for new capital ships, the three s begun in 1893.

Italy's defeat at the Battle of Lissa continued to inhibit naval expansion in the 1870s. A naval commission convened in 1871 concluded that the Regia Marina's capabilities in the Adriatic and Mediterranean were so poor in comparison to Italy's neighbors that future Italian naval policy should be oriented more towards coastal defense than constructing a powerful battle fleet. The commission's findings recommended future funds should be diverted away from further ironclads and towards establishing over 30 coastal forts instead. These findings resulted in the Italy's 1871 naval budget being cut to 26,800,000 lira, the lowest amount ever afforded to the Regia Marina in the years after Lissa. Incidentally, the 1871 budget would also mark the only time in history where the Regia Marina received less funds than the Austro-Hungarian Navy. The 1871 budget would signal the nadir of Italian naval fortunes however, as subsequent budgets would slowly rise throughout the 1870s as newly appointed naval engineer Benedetto Brin worked to rebuild the Regia Marina.

Italian Naval Budgets: 1874–1880
Before either of these ships were even launched however, the Chamber of Deputies agreed to the construction of two additional ironclads to accompany the "Caio Duilio" class. The s would prove to be among the largest ironclad warships in the world at the time of their commissioning. The "Italia" class consisted of the ironclads and. Both ships were designed by Brin, who chose to discard traditional ironclad belt armor entirely, relying instead on a combination of very high speed and extensive internal subdivision to protect the ships.

As the second class in Italy's new warship program designed to give the Regia Marina favorable numbers over the Austro-Hungarian Navy, the "Italia" class not only presented Italy's desire to rebuild its naval power following the Battle of Lissa, but it also signaled an era of changing technology which would soon put the ironclad arms race between Italy and Austria-Hungary, and indeed the ironclad itself, to an end. The design of the "Italia" class, such as their speed, light armor, and armament of very large guns, has led some naval historians to refer to the "Italia" class as prototypical battlecruisers, blurring the lines between "ironclads" and the future warships which would come to dominate the early 20th century. "Italia" was laid down at Regio Cantiere di Castellammare di Stabia in January 1876, while Cantiere navale fratelli Orlando began construction on "Lepanto" in November that same year.

After his success with designing and obtaining the necessary money to construct the "Caio Duilio" and "Italia"-class ironclads, Brin was appointed Italian Minister of the Navy in March 1876. After taking office, he began drawing up plans for a major fleet expansion, the largest in Italian history. Brin envisioned a modern Regia Marina of 16 ironclads, 10 cruisers, and 46 smaller warships. The project would take a decade to implement and cost 146 million lira. Brin obtained the support of King Victor Emmanuel II for the plan in November 1876, and nine months later the Chamber of Deputies approved the package, including multiple internal reforms within the Regia Marina designed to save money for the implementation of Brin's plan, including the decommissioning and scrapping of several older warships. By the time "Italia" was commissioned into the Regia Marina in October 1885, all three ships of the "Principe di Carignano" class, as well as the ironclad "Re di Portogallo", had either been broken up or decommissioned.

Political and technological developments throughout the 1870s and 1880s would ultimately bring the naval arms race, which Austria-Hungary and Italy had been engaged in for roughly 20 years, to a close. The primary political and technological drivers of this would be the signing of the Triple Alliance in 1882, and the emergence of the pre-dreadnought battleship.

Italy would construct two more classes of ironclads, the and the. However, by the time, the first ship of her namesake class, was laid down by Regio Cantiere di Castellammare di Stabia on 3 August 1881, the ironclad arms race between Italy and Austria-Hungary was coming to an end. The completion of in February 1895, the final ironclad of the Regia Marina, gave Italy the third largest navy in the world, behind only the United Kingdom and France. Despite this, by the time the final ships of the "Re Umberto" class had been completed, the United Kingdom had already begun building the s, the first pre-dreadnought battleships, which rendered older ironclad battleships obsolete. In addition, technological progress, particularly in armor production techniques—first Harvey armor and then Krupp armor—contributed to the ships' rapid obsolescence.

By the 1880s, the concept of the ironclad was giving way to that of the battleship. This decade marked the beginning of the era of the "Pre-dreadnought battleship", sea-going battleships built between the mid- to late 1880s and 1905. The distinction however between the era of the ironclad and the era of the pre-dreadnought is blurred by the fact that ironclad designs evolved into battleships over time. This can be seen in the outline of the last ironclads build by Austria-Hungary and Italy, which when contrasted with each nation's oldest ironclads, illustrate major differences in design and construction. The ironclads and pre-dreadnoughts of the 1870s and 1880s were largely built from steel, and protected by hardened steel armor, as opposed to the iron plating and casemate designs of older ironclads. The distinctions between later ironclads and pre-dreadnought battleships can also be found in the armament and propulsion systems of each ship. Pre-dreadnoughts carried a main battery of very heavy guns in barbettes in either open or armored gunhouses which were supported by one or more secondary batteries of smaller guns. They were also powered by coal-fuelled triple-expansion steam engines.

The distinction between ironclads and pre-dreadnought battleships became blurred in foreign navies outside of Italy and Austria-Hungary as well, most notably in the British Royal Navy with the, ordered in 1880. These ships reflected developments in ironclad design, being protected by iron-and-steel compound armor rather than wrought iron. Equipped with breech-loading guns, the Admirals continued the trend of ironclad warships towards gigantic weapons. The guns were mounted in open barbettes to save weight. Some historians see these ships as a vital step towards pre-dreadnoughts; others view them as a confused and unsuccessful design.

In contrast to the chaotic development of ironclad warships in preceding decades, the 1890s saw navies worldwide start to build battleships to a common design as dozens of ships essentially followed the design of the British. The similarity in appearance of battleships in the 1890s was underlined by the increasing number of ships being built. New naval powers such as Germany, Japan, the United States, and Italy and Austria-Hungary, began to establish themselves with fleets of pre-dreadnoughts, while the navies of the United Kingdom, France, and Russia expanded to meet these new threats. The decisive clash of pre-dreadnought fleets was between the Imperial Russian Navy and the Imperial Japanese Navy during the Battle of Tsushima in 1905.

The pre-dreadnoughts themselves would later be made obsolete by the arrival of in 1906. "Dreadnought" followed the trend in battleship design to heavier, longer-ranged guns by adopting an "all-big-gun" armament scheme of ten 12-inch guns. Her innovative steam turbine engines also made her faster. The existing pre-dreadnoughts were decisively outclassed, and new and more powerful battleships were from then on known as dreadnoughts while the ships that had been laid down before were designated as pre-dreadnoughts.

The changing nature of political alliances in the 1880s also spelled the end of the arms race. For 20 years, both Italy and Austria-Hungary had used the threat of the other to justify engaging in constructing and purchasing numerous ironclad warships. However, following the first dissolution of the League of the Three Emperors in 1878, Austro-Hungarian Foreign Minister Baron Heinrich Karl von Haymerle began negotiations with Rome to improve relations between Italy and Austria-Hungary. Pöck argued strongly against improving relations with Italy, recognizing that a friendly Italy would effectively render all arguments for a sea-going Austro-Hungarian Navy largely pointless. Nevertheless, Italian foreign policy views since the 1860s had altered considerably, and Italy's attention had since turned away from Tyrol and Trieste and instead towards North Africa. In an attempt to redirect Italian territorial ambitions away from Austria-Hungary, Haymerle encouraged Italian claims on Tunis, and promised Austria-Hungary's diplomatic support for Italian colonial plans in North Africa in exchange for Italian guarantees to respect Austro-Hungarian influence in the Balkans.

Italy was further distracted from Austria-Hungary and the naval arms race between the two nations when France established a protectorate over Tunisia in May 1881. Italy had coveted the Beylik of Tunis as part of its own colonial ambitions. Anti-French sentiment subsequently gripped the Italian public, press, and politicians, but lacking any allies, Italy was powerless to stop the incorporation of Tunisia into the French colonial empire. As a result, Austro-Hungarian attempts to improve relations with Italy began to be warmly received in Rome, eventually leading to a visit to Vienna by King Umberto I in October 1881. This was followed up with the signing of the Triple Alliance between Italy, Austria-Hungary, and Germany in May 1882.

Italy would continue to build up its naval force in the years after the singing of the Triple Alliance, but the terms of the treaty led Italy to concede the Adriatic Sea to the interests of Austria-Hungary. Instead, Italian naval plans were redirected towards France. Brin's naval program thus went forward within the Regia Marina, but Italian attentions were redirected to the Western Mediterranean and Tyrrhenian Sea. For Austria-Hungary, the Triple Alliance ended the threat of Italian irridentism aimed at many of its coastal possessions, gave the Empire a relatively free hand in the Adriatic, and protected two of Austria-Hungary's land borders in the event of a war with Russia. However, the results of the alliance would prove to be disastrous for the Austro-Hungarian Navy. The lack of a strong potential opponent determined to contest the Adriatic Sea eliminated most arguments in favor of a large fleet. Indeed, it would not be until 1893 before the Austro-Hungarian Navy would construct another class of capital ships.

Even after Italy and Austria-Hungary became allies under the Triple Alliance however, mutual suspicions and areas of conflict remained between both nations. Italy would go on to improve its relations with France after 1902, negating one of the key issues which led to it joining the Triple Alliance in the first place. Furthermore, enduring nationalism among Italians within Austria-Hungary, and Italian irredentist claims of important Austrian territories, such as Tyrol and Trieste, continued to concern Austria-Hungary. Likewise, Italy grew worried at the naval expansion Austria-Hungary engaged in at the onset of the 20th century, particularly under "Marinekommandant" Hermann von Spaun and later under Rudolf Montecuccoli. These trends would spark a second naval arms race centered around the construction of battleships at the turn of the century, which would later intensify considerably in the years leading up to World War I.

Seizing upon the decline of the Regia Marina in the years immediately after the Battle of Lissa, Tegetthoff worked to continue the efforts of Archduke Ferdinand Max of expanding the ironclad fleet of the now Austro-Hungarian Navy. Tegetthoff found political allies in the Austro-Hungarian Minister of War Carl von Franck and retired Admiral Bernhard von Wüllerstorf-Urbair. Wüllerstorf's and Franck's primary arguments in favor of continuing with the ironclad program Austria had engaged in prior to the Seven Weeks War lay largely along economic grounds. The two believed that constructing new ironclad warships would rejuvenate Austria-Hungary's economy following the defeat at the hands of Prussia and Italy, and that such a fleet would help to open up new commercial opportunities in the Levant and the Middle East. These proposals would be shelved however while Austria continued to reel from the military defeats inflicted by Prussia, and several cabinet reshufflings by Emperor Franz Joseph I resulted in a government more interested in pursuing revenge against Prussia than constructing new ironclads, which would be of little use in a hypothetical second war with Prussia.

Austro-Italian ironclad arms race

A naval arms race between the Austrian Empire and Italy began in the 1860s when both ordered a series of ironclad warships, steam-propelled vessels protected by iron or steel armor plates and far more powerful than all-wood ships of the line. These ships were constructed to establish control over the Adriatic Sea in the event of a conflict between the two countries.

The unification of much of Italy in this time period resulted in the amalgamation of the various navies of the former Italian states into the "Regia Marina" (Royal Navy). The Sardinian component included two ironclads, ordered from France in 1860, which became Italy's first broadside ironclads. The country quickly began a substantial construction program to bolster the "Regia Marina", as the Italians believed that a strong navy would play a crucial role in making the recently unified kingdom a great power.

These actions captured the attention of the Austrian Empire, which viewed Italy with great suspicion and worry, as irredentist claims by Italian nationalists were directed at key Austrian territories such as Venice, Trentino, and Trieste. In response to the growing strength of Sardinia—soon to be Italy—the Imperial Austrian Navy ordered two ironclads in 1860. This began a naval arms race between Austria and Italy, centered around the construction and acquisition of ironclads. This continued for the next six years, and by the time the war broke out between the two in 1866, Austria possessed seven ironclads to Italy's twelve.

While Italy emerged on the winning side of the war and acquired the Kingdom of Lombardy–Venetia under the terms of the Treaty of Vienna, the "Regia Marina" was decisively defeated at the Battle of Lissa by the much smaller Imperial Austrian Navy. Their poor performance led to a period of neglect with reduced naval budgets and a halt to new ship construction; Italy would not have another ironclad laid down until 1873.

Meanwhile, Austria reformed itself into the Austro-Hungarian Empire in 1867 after losing the Seven Weeks War to Prussia. In the years following the Battle of Lissa, Wilhelm von Tegetthoff would oversee the construction of three additional ironclads and the rebuilding of a fourth. After Tegetthoff's death in 1871, the Austro-Hungarian Navy entered its own period of neglect, with just five additional ironclads being constructed in the ensuing thirteen years. Both navies engaged in further construction projects throughout the 1870s and early 1880s, but the arms race ended in the 1880s due the signing of the Triple Alliance between Italy, Austria-Hungary, and Germany in 1882 and the introduction of new technologies that led to the development of pre-dreadnought battleships. Despite their alliance, however, Italy and Austria-Hungary would engage in a second naval arms race centered around the construction of battleships at the turn of the century. This arms race would continue until the beginning of World War I.

Within the Kingdom of Lombardy-Venetia, the revolution in Vienna sparked anti-Habsburg riots in the cities of Milan and Venice. Austrian Field Marshal Joseph Radetzky was unable to defeat the Venetian and Milanese insurgents in Lombardy-Venetia, and had to order his forces to evacuate western Italy, pulling his troops back to a chain of defensive fortresses between Milan and Venice known as the Quadrilatero. With Vienna itself in the middle of an uprising against the Habsburg Monarchy, the Austrian Empire appeared on the brink of collapse. On 23 March 1848, just one day after Radetzky was forced to retreat from Milan, The Kingdom of Sardinia sought to capitalize on the chaos engulfing the Austrian Empire and declared war, sparking the First Italian War of Independence.

After nearly driving Austrian forces out of the Italian peninsula altogether, fortunes turned for the Kingdom of Sardinia. The Papal States and the Kingdom of the Two Sicilies, who had initially allied with Sardinia against Austria, pulled out of the war, having barely participated in the fighting at all. Austrian reinforcements also bolstered Radetzky's forces in the Italian peninsula and following the Battle of Custoza, the tide of the war turned turned in Austria's favor. This victory was followed up by Sardinia's decisive defeat at the Battle of Novara in March 1849, which was followed by King Charles Albert of Sardinia abdicating the throne of Sardinia in favor of his son Victor Emmanuel II. The ensuing peace in August 1849 ended the war in an Austrian victory.

After the failure of the First Italian War of Independence, Sardinia began the search for potential allies. Sardinian Prime Minister Camillo Benso, Count of Cavour, found French Emperor Napoleon III supportive of an alliance with Sardinia following the Crimean War, in which France and Sardinia were allies against Russia. After the Plombières Agreement of 1858, Napoleon III and Cavour signed a secret treaty of alliance against Austria whereby France would assist Sardinia in return for Nice and Savoy being ceded to France. The Franco-Sardinian forces quickly defeated the Austrians during the spring of 1859 and after the Battle of Solferino, Austria ceded most of Lombardy and the city of Milan to France under the Treaty of Zürich, who transferred it to Sardinia in exchange for Savoy and Nice. During the war, Italian revolutionary Giuseppe Garibaldi would emerge as a leader for the unification of Italy. Garibaldi, initially supported a republican revolution to bring the peninsula together. However, he eventually concluded that only the Kingdom of Sardinia could unify the Italian states into one nation.

In 1860, uprisings in Messina and Palermo in the Kingdom of the Two Sicilies provided Garibaldi with an opportunity to begin the conquest of Southern Italy. He gathered about a thousand volunteers – called "i Mille" (the Thousand), or, as popularly known, the Redshirts – in two ships named "Il Piemonte" and "Il Lombardo", and left from Genoa on 5 May. On 11 May, Garibaldi and his forces landed at Marsala, on the westernmost point of Sicily. Garibaldi rapidly gained control of the island, declaring himself dictator of Sicily in the name of Victor Emmanuel II of Italy on 14 May.

After victories at Calatafimi, Palermo, and Milazzo, nearly the entire island was under Garibaldi's control by the end of July. On 19 August, his men disembarked in Calabria in anticipation of an offensive aimed at capturing Naples, capital of the Kingdom of the Two Sicilies. Troops from the Kingdom of the Two Sicilies defending Calabria offered little resistance, as several units of the Bourbon army disbanded or even joined Garibaldi's ranks. On 30 August a Sicilian army was officially disbanded at Soveria Mannelli, while only minor and dispersed units continued the fight. The Neapolitan fleet behaved in a similar way and offered little to no resistance against Garibaldi's forces. King Francis II of the Two Sicilies was thus forced to abandon Naples and entrench himself in the fortress of Gaeta, while a last stand was set up on the Volturno river, north of Naples. On 7 September, Garibaldi entered Naples and was hailed as a liberator by the city.

While Garibaldi conquered Southern Italy, the Kingdom of Sardinia invaded the Papal States, conquering most of Central Italy after the Battle of Castelfidardo. Sardinian troops then entered the Kingdom of Two Sicilies from the north and joined Garibaldi's forces. After the Battle of the Volturnus, the only organized Bourbon force left in Italy remained at Gaeta. On 21 October, a plebiscite confirmed the annexation of the Kingdom of the Two Sicilies to the Kingdom of Sardinia by an overwhelming majority, while on 26 October, Victor Emmanuel II and Garibaldi met at Teano in northern Campania, where Garibaldi shook Victor Emmanuel's hand and hailed him as "King of Italy". The last Bourbon stronghold at Gaeta finally surrendered after a long siege in February 1861. With the capture of Gaeta, a unified Kingdom of Italy was proclaimed on 17 March 1861. King Victor Emmanuel II of Savoy was then declared King Victor Emmanuel II of Italy.

In March 1860, Cavour became the Kingdom of Sardinia's naval minister. He assumed this role at a time when Sardinia was rapidly expanding into Northern and Central Italy. Earlier that month, plebiscites in Tuscany, Modena and Reggio, Parma, and Romagna produced overwhelming majorities in favor of annexation by Sardinia. This expansion of Sardinia likewise resulted in the growth of the kingdom's navy. In April, Cavour oversaw the incorporation of Tuscany's small fleet into the Sardinian Navy. Immediately after the Tuscan fleet had been integrated into the Sardinian Navy, Cavour placed an order with the Société Nouvelle des Forges et Chantiers de la Méditerranée to construct two armored warships in Toulon. These two ships would become the "Formidabile" class, the first ironclads to serve in the Italian Peninsula. While foreign powers such as Austria watched the growth of Sardinia and the expansion of its army closely, the consolidation of the Sardinian Navy after the incorporation of multiple states across the Italian Peninsula received far less attention. This allowed Cavour to continue his work incorporating the various fleets Sardinia inherited as more and more Italian states joined the growing kingdom.

Garibaldi's conquest of the Kingdom of Two Sicilies marked the beginning of the Sardinian Navy's transformation into the Italian Regia Marina. When the Italian revolutionary landed in Sicily in May 1860, only two steamships were at the disposal of his thousand volunteers. By the time Garibaldi had conquered the island, he had in his possession over 12 steam ships of various types which would later assist in transporting his army across the Strait of Messina to Southern Italy. These numbers were bolstered by the desertion of most of the Neapolitan Navy in July 1860 to Garibaldi's cause. Following Garibaldi's conquest of Naples in September, the remainder of the Neapolitan Navy was handed over to Carlo Pellion di Persano for incorporation into the Sardinia Navy.

The rest of Southern Italy fell in short order and in March 1861, the Kingdom of Italy was proclaimed. By this time, the vast majority of the former navies of the various Italian states had been brought into the Sardinian Navy. Two weeks after the establishment of the Kingdom of Italy, the Italian Regia Marina was created as a single unified naval force for the newly formed kingdom. Cavour immediately asked the Italian Chamber of Deputies for an unprecedented 20,000,000-lire budget to expand the Regia Marina beyond its newly acquired ships. The funds would also be used to construct additional ironclads as well as establish an Italian naval base at Ancona on the Adriatic Sea. The stage was thus set for the Italian ironclad program.

Even before the unification of Italy, the Imperial Austrian Navy had been undergoing its own expansion ever since the promotion of Archduke Ferdinand Maximilian of Austria (the future Emperor Maximilian I of Mexico) to the office of "Kontreadmiral" (Rear Admiral) and to the post of "Oberkommandant der Marine" (Commander-in-Chief of the Navy) in September 1854. At the age of 22, Ferdinand Max became the youngest "Oberkommandant" in the history of the Imperial Austrian Navy, being a year younger than when Archduke Friedrich of Austria assumed command of the navy ten years earlier. Despite his age and his lack of experience in battle or command on the high seas, Ferdinand Max was described by naval historian Lawrence Sondhaus as "the most gifted leader the navy had ever had, or ever would have." Ferdinand Max worked hard to separate the Imperial Austrian Navy from its dependence upon the Imperial Austrian Army, which had nominal control over its affairs. As the younger brother to Franz Joseph I, Ferdinand Max was given great freedom by the Emperor to manage the navy as he saw fit, especially with respect to the construction and acquisition of new warships.

Ferdinand Max immediately went to work expanding the Imperial Austrian Navy. Fears of over-dependence upon foreign shipyards to supply Austrian warships enabled him to convince his brother to authorize the construction of a new drydock at Pola, and the expansion of existing shipyards in Trieste. Furthermore, Ferdinand Max initiated an ambitious construction program in the ports of Pola, Trieste, and Venice, the largest the Adriatic had seen since the Napoleonic Wars. By 1855, a screw-powered ship-of-the-line was under construction in Pola after failed bids to construct the ship with British and American shipbuilding firms, while two screw-frigates and two screw-corvettes were being built in Trieste and Venice respectively.

By the spring of 1855, the Imperial Austrian Navy consisted of four frigates, four corvettes, and two paddle steamers in active service in the Mediterranean Sea. This would be the largest Austrian fleet since before the War of Austrian Succession over 100 years prior. Despite these efforts however, the Imperial Austrian Navy was still considerably smaller than its French, British, or Sardinian counterparts. Indeed, the Imperial Austrian Navy was still attempting to catch up to the technological developments which had emerged during the first half of the 19th century with respect to steam power, when the emergence of the French iron-plated floating battery "Dévastation" gained international attention following its use during the Crimean War in October 1855. "Dévastation" would signal the beginning of the emergence of ironclad warships over the course of the next decade.

Following Austria's defeat during the Second War of Italian Independence, Ferdinand Max proposed an even larger naval construction program than the one he had initiated upon his appointment as "Oberkommandant der Marine". This fleet would be large enough not only to show the Austrian flag around the world, but also to protect its merchant marine as well as thwart any Adriatic ambitions from the growing Kingdom of Sardinia. However, constitutional reforms in Austria after the military defeat earlier that summer, as well as the recent introduction of ironclads into the navies of the world, would make the proposal more expensive than he had initially intended. While the Archduke had previously been given free rein over naval affairs, and had enjoyed an unprecedented allocation of new funds to complete his various expansion and modernization projects, Austria's financial difficulties in the immediate aftermath of the war stalled his plans for the time being. Despite these obstacles, the initiation of the Italian ironclad program between 1860 and 1861, coupled with Austrian fears of an Italian invasion or seaborne landing directed against Venice, Trieste, Istria, and the Dalmatian Coast, necessitated an Austrian naval response to counter the growing strength of the Regia Marina.

Austria's defeat in the Second War of Italian Independence in 1859 marked the end of the Italian Peninsula being divided up among several independent states. As the Kingdom of Sardinia swiftly annexed the United Provinces of Central Italy in early 1860, the rapid growth of Sardinia's territory and armed forces quickly earned the attention of the Austrian government in Vienna. While Austrian Emperor Franz Joseph I ordered Austria's army to mobilize in anticipation of a potential Sardinian attack directed at Venice, little focus was given to the similar growth of the Sardinian Navy as it inherited the fleets of several Italian states.

When Garibaldi's conquest of the Kingdom of the Two Sicilies began in May 1860, the Austrian Empire responded by recalling its small fleet stationed in the Levant under the command of "Fregattenkapitän" (Captain) Wilhelm von Tegetthoff. "Kontreadmiral" (Rear Admiral) Bernhard von Wüllerstorf-Urbair then deployed the Imperial Austrian Navy to the waters off of Naples in order to prevent Garibaldi from attacking the city by sea. However, the defection of the Neapolitan Navy and Garibaldi's rapid advance up the Italian Peninsula after making landfall at Calabria rendered this fleet useless. The Austrian fleet was instead tasked with transporting King Francis II from Naples to Gaeta.

Sardinia's annexation of most of Central Italy in early 1860 had caused concern for the Austrian Empire, but the collapse of the Kingdom of the Two Sicilies in just a matter of months sparked a diplomatic and military crisis in Vienna. While Garibaldi finished his conquests, the Sardinian Army invaded the Papal States and the growing Sardinian Navy entered the Adriatic to blockade the port of Ancona. The Austrian Empire viewed Sardinian warships in the Adriatic as an overtly hostile act, and fears of Garibaldi continuing his military campaigns by attempting a landing in Istria or the Dalmatian Coast resulted in even greater alarm. The Austrian government knew these lands were deemed "Italia irredenta" (Unredeemed Italy) by revolutionaries such as Garibaldi, due to their historical ties with the former Venetian Republic. To make matters worse, Garibaldi had several hundred Hungarian volunteers in the ranks of his army. Vienna calculated that should a landing along the Austrian coastline by Garibaldi be successful, the whole southern and eastern portions of the country could potentially erupt into revolution, much like the revolutions in 1848 which nearly toppled the Austrian Empire altogether.

The Italian ironclad program began before there even was a "Kingdom of Italy". The first two ironclad warships in the Italian Peninsula, the "Formidabile"-class ironclads and, were ordered by Cavour in the spring of 1860, before Garibaldi had even landed in Sicily. The ships had originally been intended to serve as armored floating batteries, and their designs were thus based on the France's which had earned recognition at the Battle of Kinburn during the Crimean War. Despite these plans, the rapid expansion of the Kingdom of Sardinia and the subsequent unification of Italy resulted in the ships being converted into sea-going broadside ironclads. This change signaled the direction of Italian foreign and naval policy in the years immediately after the formation of the Kingdom of Italy, as the ships were aimed at defeating the Imperial Austrian Navy in open combat. Indeed, even after the unification of Italy and the establishment of a single Kingdom of Italy in 1861, many Italians believed the "Risorgimento" had not yet been complete, as the Austrian Empire still possessed several Italian-speaking territories, most notably Venice.

"Terribile" would be the first Italian ironclad to be commissioned into the Regia Marina, joining the fleet in September 1861. She was soon followed by her sister ship "Formidabile", which was commissioned in May 1862, the same month that Austria's first ironclad, "Salamander", would be commissioned into the Imperial Austrian Navy.

While Austria continued to refuse to grant diplomatic recognition of the newly formed Kingdom of Italy, it could not continue to ignore the threat the Regia Marina's own naval expansion program, under the direction of Cavour, posed to the Austrian coastline. In response to the assembly of the Italian "Formidabile" class, Archduke Ferdinand Max personally ordered the construction of the "Drache"-class ironclads at the end of 1860. These ships, constructed by a Trieste-based shipbuilding firm, would be the first ironclad warships of the Imperial Austrian Navy. Austria had considered constructing ironclads before the "Drache" class, but the expensive cost of British shipbuilding offers in December 1858 led to the offers being rejected by "Kontreadmiral" (Rear Admiral) Ludwig von Fautz. However, the emergence of Italy's own ironclad program led to these concerns being rendered irrelevant in the face of the threat the Regia Marina posed.

Ferdinand Max ordered the ships and their engines in December 1860 from domestic shipyards. This work was done before any formal approval for the project could be granted by Franz Joseph I, but in February 1861 the Emperor allowed the construction to proceed. Ten says later, the Emperor also privatized the Navale Adriatico shipyard, in order to increase private sector interest in Austria's emerging ironclad program.

When the first "Drache"-class ironclad, "Salamander", was commissioned into the Imperial Austrian Navy in May 1862, she was the most expensive warship ever constructed for the Imperial Austrian Navy. She and her sister ship "Drache" cost 2,300,000 Florins each, a staggering amount of money at the time, and over six times the cost of previous Austrian warships. Despite the expensive nature of the ships involved, and before either the Austrians or Italians had commissioned a single ship into their respective navies, plans were already being made in both countries to develop more ironclad warships, each to counter the naval strength of the other.

With the commissioning of the Austrian "Drache"-class ironclads, both the Austrian Empire and the Kingdom of Italy possessed at least one ironclad warship, with more on the way. Over the next five years, the ironclad arms race between the two countries would only grow, as each country worked to gain a naval advantage over the other. While the "Drache"-class ships were still under construction in Trieste, Ferdinand Max began work in securing the necessary funding to continue Austria's ironclad program.

In April 1861, the Archduke drew up his first plans for a modernized and armored Imperial Austrian Navy. In his submission to Emperor Franz Joseph I, he argued that nearly all of Austria's diplomatic and military challenges could be addressed by engaging in a large ironclad construction program. His proposal outlined a battle fleet of nine armored ironclads, with seven more warships to join the two "Drache"-class ships in the autumn of 1863. Ferdinand Max wrote that the recent technological revolution in naval affairs which had been caused by the emergence of ironclads provided for a clean slate in which the Imperial Austrian Navy could develop newer warships on the same scale and pace as the other Great Powers of Europe, as older wooden ships of any type or nationality had been rendered obsolete by the new armor-plated ships.

Ferdinand Max was also sure to include the diplomatic benefits of engaging in an ambitious ironclad construction program. He argued that constructing a further seven ironclads by 1863 would allow the Imperial Austrian Navy to possess a fleet one-third the size of the French Navy, considered one of the largest and strongest in the world. This new fleet would thus increase the value of any military alliance Austria were to make with the other European powers, and potentially end the diplomatic isolation that the Empire had been facing since the Crimean War. Furthermore, the need for Austria to construct these warships was urgent in the eyes of Ferdinand Max, as the Italian government was devoting substantial amounts of money to building ironclads for the Regia Marina.

While Ferdinand Max was laying out plans for Austria's ironclad program, the Regia Marina was already executing its own program. Following up on the construction of the "Formidabile" class with another order for more warships, Cavour met with New York shipbuilder William H. Webb in Turin in late 1860, and concluded a deal was made for his shipyard to construct two armored frigates, which would eventually become the ironclads and. Cavour's agreement with Webb was made a state secret, and it would not be until after his death in June 1861 that the contracts for the ships were signed by General Luigi Menabrea, who succeeded Cavour as head of the Regia Marina. "Re d'Italia" was the first ship of the class to be laid down in New York City in November 1861 and her sister ship "Re di Portogallo" followed in December.

News of the Italian project, which became public in August 1861, sparked panic in Vienna. Just four months earlier, the Austrian Reichsrat had rejected Ferdinand Max's naval expansion program, only allocating the Archduke 6,000,000 Florins to run the Imperial Austrian Navy in 1862. The following month, Ferdinand Max briefed the Austrian Council of Ministers in Vienna on the Italian naval expansion. He told the council the Imperial Austrian Navy needed a budget of 15,100,000 Florins for the year 1862, over twice what had been allocated earlier that year. Ferdinand Max argued that the additional funds were needed to construct three more ironclads in short order, lest Austria fall behind its Italian neighbor. The Archduke's modified ironclad program would give the Austrian Empire a navy he believed would be capable of defeating the Regia Marina by the summer of 1862. Despite objections from the Austrian Finance, State, and Foreign Ministries, Emperor Franz Joseph I approved the program in October.

Construction of Austria's second class of ironclads thus began in October 1861 by Stabilimento Tecnico Triestino. Again designed by Romako, the ironclads,, and were all intended to be improvements over the previous "Drache" class. Each ship was designed by Romako to be larger with more powerful engines and carry a larger gun battery than their predecessors. Having encountered political opposition from the Austrian Reichsrat earlier in the year when he requested for additional funds, Ferdinand Max attempted to grow political support for the construction of future ironclads by purchasing some of the armor plating from a rolling mill in Celje owned by Reichsrat member Johann von Putzer. The Henckel von Donnersmarck Zeltweg works were likewise contracted to deliver armor plates for the ironclads, as were the same French firms which had provided the armor for the "Drache" class. Once more, the same subterfuge was employed to obtain the French-made plates and armored ram bows for the warships. These efforts proved to be far easier for Austrian agents based in Geneva than before, due to the growth in arms trafficking which followed the outbreak of the American Civil War. Indeed, the Austrians merely had to pose as Union or Confederate agents in order to avoid detection.

In order to address the gap between naval expenditures and construction plans with the will of the Reichsrat, which had rejected Ferdinand Max's ambitious proposals the year before, Emperor Franz Joseph I accepted a proposal from War Minister Count August von Degenfeld to convene a special commission to look at the role of the Imperial Austrian Navy in Austrian foreign and military policy. The commission would also examine the various proposals for the direction of the navy, to include Ferdinand Max's ironclad project. The Emperor convened this commission in February. The key question Franz Joseph I asked the commission was whether or not it was essential to maintain the Imperial Austrian Navy in order for Austria to remain a Great Power in Europe, if it was necessary for the navy to expand to the same size as the Regia Marina, and whether or not it the navy should transition towards prioritizing coastal defense, as opposed to wrestling control of the Adriatic or Mediterranean Seas from Italy in the event of war.

At the commission's meeting in March 1862, Degenfeld disagreed with Möring's analysis and declared that it was imperative for the Imperial Austrian Navy possess an ironclad fleet as powerful as the Regia Marina. Matthais von Wickenburg, the recently appointed naval minister, argued strongly that Ferdinand Max's ironclad construction proposals were essential to protecting Austria's growing merchant marine, and that ignoring Austria's seaborne trade by favoring coastal defense would harm the Austrian economy. Despite these arguments, Austrian Foreign Minister Johann von Rechberg strongly opposed the construction of any further ironclads, arguing along the same lines as Möring that "Austria is a land power, whose fate in case of war will be determined on land."

Rechberg began the commission's second meeting by attacking Ferdinand Max's proposal on financial grounds, arguing that the Imperial Austrian Navy had drastically overstepped financial allotments over the past decade, with the navy consistently overspending the monetary limits placed upon it under the Navy Law of 1850. These arguments were rebutted by Wickenbug and Degenfeld on the grounds that the Navy Law of 1850 had been amended in 1858, and that the large technological advancements which had played out since the First War of Italian Independence had likewise necessitated larger naval spending, as ironclads were far more expensive than traditional wooden ships. Arguments against expanding the navy on the grounds that allocating additional funds for constructing new ironclads may negatively effect the Imperial Austrian Army were rejected by the members, and by a vote of six to five the commission voted to support the goal of maintaining an Imperial Austrian Navy that would be as large as the Italian Regia Marina. The commission had voted in favor of adopting most of Ferdinand Max's ironclad program, but only by a narrow margin, still placing the future of the Austrian ironclad program in doubt.

The death of Italian Prime Minister Cavour in June 1861 was a major setback for the development of the Italian Regia Marina. While Menabrea, the new head of the navy, had secured the deal Cavour had worked on for the "Re d'Italia"-class ironclads to be constructed in New York City, he did not personally believe in the value of the warships and worked to undo the agreement almost as soon as he had signed it. Indeed, Menabrea doubted the value of armored warships altogether, and in the months after Cavour's death, he attempted to redirect the Regia Marina away from ironclad construction for its warships and more towards traditional wooden designs. Menabrea was supported in his skepticism by Nino Bixio, a veteran and key organizer of Garibaldi's Expedition of the Thousand, who had previously served in the Sardinian Navy prior to the unification of Italy. They found opposition in Vice-Admiral Persano, who had won recognition for his efforts in blockading Ancona and Gaeta during Garibaldi's conquest of the Kingdom of the Two Sicilies and the Sardinian invasion of the Papal States which followed.

Similar to their Austrian counterparts who were debating the practicality and usefulness of an ironclad battle fleet, in the autumn of 1861, Menabrea convened a naval commission intended to examine the state of the Regia Marina and determine the value of continuing the construction of ironclad warships. The commission immediately concluded that the Regia Marina needed to be as large as the combined navies of the Kingdom of Spain and the Austrian Empire. Italian worries over a potential Austro-Spanish alliance directed at dismembering the recently unified Kingdom of Italy and restoring the historical influence both nations had enjoyed over the Italian Peninsula in past centuries, though ultimately unfounded, caused much concern among the Italian naval officer corps. This fear was caused in part by the hostile reaction of the Spanish government after the declaration of the Kingdom of Italy. The Spanish, ruled by the House of Bourbon-Anjou, were among the first nations to condemn the invasion and annexation of the Kingdom of the Two Sicilies, and had joined Austria in withholding diplomatic recognition of both the unified kingdom and Victor Emmanuel's claim to the title of King of Italy.

In April 1862, news from across the Atlantic Ocean of the Battle of Hampton Roads reached both Italy and Austria. On 8 March 1862, the Confederate ironclad attacked the Union blockade fleet anchored in Hampton Roads. In the ensuing battle, "Virginia" sank the sailing frigates and. The next day, "Virginia" engaged the Union armored turret ship, and the two ironclads fought one another to a standstill.

The battle was be the first ever engagement between ironclad warships, and the difference between the first day of the battle when "Virginia" easily destroyed two wooden frigates, compared to the draw in her battle with the ironclad "Monitor" the following day, left an impression on most of the major navies in the world. Indeed, the battle received worldwide attention. The preeminent naval powers, the United Kingdom and France, halted further construction of wooden-hulled ships after receiving reports of the battle. The use of a small number of very heavy guns, mounted so that they could fire in all directions was first demonstrated by "Monitor" but soon became standard in warships of all types. Shipbuilders also incorporated rams like the kind employed by "Virginia" into the designs of warship hulls around the world. Within Austria and Italy, the Battle of Hampton Roads would prove to have a decisive impact on the course of the Austro-Italian ironclad arms race, influencing both nations' decision to continue with their ironclad programs and effectively resulting in the abandonment of wooden vessels forever.

In Austria, the results of the battle were so decisive that Rechberg reversed his opinion completely upon learning of the engagement, and asked the Reichsrat to approve all the new naval expenditures Ferdinand Max had been calling for. In June, the Austrian Reichsrat approved Archduke Ferdinand Max's budget, but directed the "Oberkommandant der Marine" to cut expenditures not related to training, naval construction and ship maintenance. The Reichsrat also ordered Ferdinand Max to purchase more coal from domestic sources, and to only rarely send warships out beyond the Mediterranean Sea. For 1863, the Imperial Austrian Navy was allocated some 8,900,000 Florins, a huge sum and far higher than previous budget outlays for naval affairs, but this was below the 10,900,000 Florins that Ferdinand Max had originally asked for. In compensation however, Wickenburg was able to acquire a further 4,000,000 Florins from the Reichsrat for the navy's 1862 budget. In November, the bill was approved and the Imperial Austrian Navy received its largest budget in history.

In Italy, the new Italian government convened on 7 March 1862, just one day before the "Virginia" wreaked havoc on the Union's unarmored warships. When news of the battle reached the Italian government, Persano addressed the Chamber of Deputies about the battle and argued Menabrea's proposed four ships-of-the-line were technologically obsolete, and that Regia Marina instead needed to acquire additional ironclads. Persano's plan included purchasing four ironclads from French shipyards, and constructing three additional ironclads domestically. This proposal was further revised in June, when Persano addressed the Chamber of Deputies and shared his support for incorporating Menabrea's earlier plan to purchase two ironclads from British shipyards, bringing the total number of proposed ironclads the Regia Marina would construct or purchase by 1865 to nine.

One week after presenting his ironclad plan to the Chamber of Deputies, Persano obtained approval from Prime Minister Rattazzi's cabinet to proceed. Soon after, Persano signed contracts for four ironclads to begin construction in French shipyards. These ships would ultimately form the. All four ships were designed by French naval architects, but three different shipyards were used to construct them, with and both being constructed at the Société Nouvelle des Forges et Chantiers de la Méditerranée shipyard in La Seyne, while and were constructed at the Gouin et Guibert shipyard in St. Nazaire, and the Arman Brothers shipyard in Bordeaux, respectively.

In October 1862, Persano also placed an order with the British shipyard Mare of Millwall, London, for an armored steam ram. Designed by Italian naval officer Simone Antonio Saint-Bon, financial problems related to the construction of the ironclad resulted in the order being transferred to the shipyard Harrison, also located in Millwall. Saint-Bon had originally intended the ship to be unarmed, relying only on its ram to sink enemy ships, but Harrison engineers revised the plan to include two large-caliber guns. While based on the design of USS "Monitor", the Italians intended to have two turrets as opposed to one. She would become the most expensive warship the Regia Marina had ever ordered at the time. Indeed, the costs to construct the ironclad were so high that Persano had to substitute the two British-built ironclads Menabrea had initially proposed and which he had supported, for this single warship.

In early 1863, Persano also went to work constructing a class of domestically-built ironclads. Shortly after negotiating contracts for French and British-built ships, orders for two ironclads were placed with Cantiere della Foce in Genoa. These two ships, and, were only the second class of ironclad warships to be domestically constructed in Italy. By the time construction on the ships would begin in February 1863, foreign navies had begun to experiment with the central battery ships, a design which discarded the usual broadside arrangement in favor of a shorter battery located amidships. This allowed the "Roma"-class ships to use a significantly shorter and much lighter section of side armor to protect the guns of each ship, which in turn permitted the carrying of heavier, more powerful guns.

As a result of Persano's work, by the spring of 1863 the Regia Marina had over a dozen ironclads under contract or under construction, though only the first two ships built during Cavour's tenure as Prime Minister had actually been completed.

The Austrian naval budget of 1862 would prove to be the largest such outlay the Imperial Austrian Navy would receive until 1900. Even so, the 1863 budget of only 8,900,000 Florins was far less than what Archduke Ferdinand Max had hoped for. This limited his ability to construct additional ironclads, having to scrap the third planned ship for the "Erzherzog Ferdinand Max" class. Ferdinand Max ran into even more financial issues when his plans to convert the ship-of-the-line had to be delayed due to a lack of funds. As a result, Austria was only able to construct seven ironclads between 1860 and 1865, as opposed to the nine Ferdinand Max had previously advocated for to the Austrian Reichsrat in April 1861.

In a bid to maintain the navy's finances in the face of potential budget cuts, Ferdinand Max attempted to cut expenditures in nearly every aspect of the Imperial Austrian Navy outside of ironclad construction. Patrols conducted by the Imperial Austrian Navy were severely curtailed, and warships rarely left the Mediterranean Sea. Indeed, with the exception of Tegetthoff's patrol off the coast of Greece to protect Austrian interests in the Balkan kingdom during Greece's constitutional crisis between 1862 and 1863, Austrian warships hardly ever ventured out beyond the Adriatic Sea. The smaller Austrian naval budgets also forced Ferdinand Max to reluctantly turn down proposals from foreign shipbuilders to construct additional ironclad warships for the Imperial Austrian Navy. Among those whose offers the Archduke had to reject for a lack of funds were American shipbuilder John Ericsson, the designer of USS "Monitor", and the Arman Brothers shipyard in Bordeaux, which was constructing the Italian ironclad "Ancona".

Further attempts to purchase ironclads from British shipyards which had been constructing them for the Confederacy in late 1863 failed as well, due to the sheer costs of the warships involved. Despite an increase in funds under the 1864 budget to some 12,100,000 Florins, none of the money the Reichsrat had allocated to the Imperial Austrian Navy were earmarked for ironclad construction or purchases, leaving Ferdinand Max with the same seven ironclads as before. Faced with political gridlock and having been offered the throne of the Second Mexican Empire in October 1863, Archduke Ferdinand Max resigned his post as "Oberkommandant der Marine" in early 1864 before sailing to Mexico aboard the frigate to become Emperor Maximilian I of Mexico.

In the years after Ferdinand Max's departure from Austria, the Imperial Austrian Navy suffered under further political and budgetary constraints. In April 1864, it was proposed that the naval ministry, which the former Archduke had helped to establish, be disbanded. In January 1865, Emperor Franz Joseph I dissolved the ministry and the Imperial Austrian Navy was again placed under the jurisdiction of the Austrian Ministry of War. Under the 1865 budget, just 7,100,000 Florins were allocated towards naval expenses, but once more, none of the funds were designated for warship construction. In 1866, the naval budget grew slightly to 7,800,000 Florins, but for the third consecutive year there would be no funds for additional ironclads, or other warships. Thus, when the Seven Weeks War began in June 1866, the Imperial Austrian Navy would possess only ships which had been constructed during Ferdinand Max's tenure as "Oberkommandant der Marine".

Cugia inherited a Regia Marina rapidly growing in size and quickly acquiring ironclad warships. Support among the general public and the Regia Marina's officer corps for expanding the navy and constructing new ironclads remained high, with a new naval commission even going so far as to call for a massive battle fleet of 40 ironclads. Additionally, previous opponents of ironclad warships such as Bixio, had since been convinced of their importance following the Battle of Hampton Roads. Indeed, Bixio subsequently became one of the most vocal supporters of Italy's ironclad program after having previously opposed the concept during Persano's years as head of the Ministry of the Navy.

Italian Naval Budgets: 1861–1865
Cugia attempted to carry on the work which began under Cavour and had continued under Persano. In addition to ordering additional transports, shallow-draft gunboats which could be used to seize Venice by sea, Cugia also ordered yet another class of Italian ironclads, named the. The first ship of the class,, was laid down at the Arsenale di La Spezia in August 1865. She was followed by, which was laid down the same month by Regio Cantiere di Castellammare di Stabia. The design for "Principe Amedeo" was prepared by Inspector Engineer Giuseppe De Luca. He had initially planned on using entirely wooden hulls for the ships, but had changed to composite wood and iron construction by the time the ships were laid down. The two ships were also the last Italian ironclads to feature sailing rigs and wooden hulls.

By the time discussions were underway regarding the "Principe Amedeo" class, the Regia Marina had already acquired the French-built armored frigates of the "Formidabile" class, and two more vessels of the "Re d'Italia" class were under construction in the United States. The ironclad "Affondatore" had also been ordered in the United Kingdom, while the four ships of the "Regina Maria Pia" class were under construction in French shipyards. Furthermore, three wooden steam frigates of the "Principe di Carignano" class, already under construction, were being converted into armored ships, and two more ironclads of the "Roma" class had been ordered from Italian shipyards. This meant the two new ships of the "Principe Amedeo" class would bring the Regia Marina's total number of ironclads to 16 ships.

The "Principe Amedeo" class would be the last two ships of this first generation of Italian ironclads however. The sheer number of ironclads the Regia Marina was constructing and ordering, combined with the relatively short time-span in which Italy had engaged in its ironclad build up, was beginning to place a severe strain on the newly unified Kingdom's finances. The dependence on foreign shipyards to construct many of the ironclads also helped to drastically raise costs, already high to begin with, even further. By 1865, Italian naval expenditures began to drastically outpace the budgetary outlays the Chamber of Deputies had authorized for the Regia Marina. Despite the fact that the Italian government had allocated larger naval budgets than their Austrian counterparts for every year between 1861 and 1865, for the first four years of its existence, the Regia Marina consistently spent million of lira more than what the Chamber of Deputies had authorized it. Indeed, the Regia Marina exceeded its budget by roughly 75,000,000 lira between 1861 and 1865.

Italy once again had a turnover in Prime Ministers following public backlash over the September Convention of 1864. Minghetti was ousted and Alfonso Ferrero La Marmora succeeded him on 28 September 1864. La Marmora's first objective as prime minister was to cut government expenditures and finally balance the Italian budget. After appointing General Diego Angioletti to the office of Minister of the Navy, La Marmora worked the shrink the size of the Regia Marina's budget, and bring the era of overspending budgetary outlays to an end. Using Spain's decision to finally recognize the Kingdom of Italy as a catalyst to begin debates over the size of the naval budget, La Marmora argued before the Chamber of Deputies that the Regia Marina possessed or had under construction more than enough warships of all types, including ironclads, to defeat the Imperial Austrian Navy in battle. Despite strong opposition from Persano, Cugia, and Bixio, La Marmora's government began to reduce naval expenditures and ended further ironclad purchases and construction projects for the time being. The government would instead focus on completing ships already under construction or under contract in the lead up to the Seven Weeks War.

Austria's attention was drawn away from Italy at a time when it appeared the ironclad arms race between the two nations was fading. In late 1863, the Schleswig-Holstein Question once again captured the attention of most of the German Confederation after Christian IX of Denmark became King of Denmark and Duke of Schleswig and Holstein. He declared the Duchy of Schleswig an integral part of Denmark in a violation of the London Protocol of 1852, which emphasized the status of the Kingdom of Denmark as distinct from the independent Duchies of Schleswig and Holstein. The annexation of the largely German populations of Schleswig and Holstein gave the German Confederation a "casus belli" to use against Denmark, and the Second Schleswig War began when Prussian and Austrian troops crossed the border into Schleswig in February 1864. After eight months of fighting, the Danes were defeated and the two nations won control of Schleswig and Holstein in the Peace of Vienna.

The Peace of Vienna was not to last however. Shortly after concluding the Second Schleswig War, Minister President of Prussia Otto von Bismarck began to lay the foundations for diplomatically isolating Austria and giving Prussia the opportunity to settle the German Question once and for all by force of arms. In April 1866, the Prussian government signed a secret agreement with Italy, committing each state to assist the other in a war against Austria. On 14 June, the Seven Weeks War began when Prussia attacked Austria's allies in the German Confederation.

Nevertheless, Italy's ironclad advantage of 12 to 7, led to great expectations. Nino Bixio, who had previously opposed the concept of ironclads only to enthusiastically endorse their acquisition by the Kingdom of Italy following the Battle of Hampton Roads, described the Regia Marina as "Incontestably superior" to the Imperial Austrian Navy. These sentiments were shared by the Italian public, the Chamber of Deputies, and the Regia Marina itself. A quick victory over the Imperial Austrian Navy was expected, to be followed by Italian naval dominance over both the Mediterranean and Adriatic Seas.

La Marmora resigned as Prime Minister on 17 June in order to become King Victor Emmanuel II's chief-of-staff. Angiolette likewise resigned as Minister of the Navy in order to be given a command with the Italian army, which was expected to see the bulk of the fighting with Austria. Their replacements, Bettino Ricasoli as Prime Minister and Agostino Depretis as Minister of the Navy, set out to secure Italian dominance over the Adriatic. Shortly after Italy declared war on Austria on 20 June, Ricasoil laid out plans for Italy's annexation of Venice, Trentino, Trieste, the Dalmatian Coast, Istria, and Fiume. Depretis strongly believed the Regia Marina was strong enough to secure these conquests. On 25 June, the Regia Marina's main battle fleet, led by Persano, made port at Ancona in anticipation of engaging the Imperial Austrian Navy in the Adriatic.

Meanwhile, the Austrian ironclad "Drache" engaged the coastal defense ship with concentrated broadsides, including hot shot, which started a serious fire aboard "Palestro". The latter attempted to withdraw, and was able to use her superior speed to escape from "Drache". Left without her original target, "Drache" turned to fire at "Re d'Italia" along with several other Austrian vessels. One of them disabled the Italian ironclad's rudder, leaving her incapable of maneuvering. In the ensuing firefight however, "Drache" was hit several times; one shell struck her commander, Captain Moll Heinrich von Moll, in the head, killing him instantly.

"Re d'Italia"s disabled rudder presented another opportunity for Tegetthoff to ram the vessel at full speed. After two collisions which occurred at angles too oblique to inflict serious damage, "Erzherzog Ferdinand Max" struck the Italian ship directly. "Erzherzog Ferdinand Max"s ram tore a gaping hole in "Re d'Italia"s hull on the port side below the ship's waterline, though the Austrian ironclad sustained no significant damage herself. Tegetthoff reversed course, allowing the Italian ironclad to lurch back to port and quickly sink. He initially ordered his crew to lower boats to pick up the Italians struggling in the water, but the Italian ironclad "San Martino" was approaching, and he could not allow his ship to become a stationary target. Instead, he ordered the aviso to remain behind and pick up the survivors while "Erzherzog Ferdinand Max" engaged "San Martino". The other Italian ships, however, did not realize "Kaiserin Elizabeth" was attempting to pick up the Italian survivors, and so opened fire on her, driving her away from the men in the water.

While the melee continued, the Austrian ironclad "Don Juan d'Austria" initially attempted to follow Tegetthoff in his second pass, but quickly lost contact with Tegetthoff's flagship in the chaos. Italian ironclads surrounded the Austrian ship, forcing the ironclad "Kaiser Max" to come to her aid. Thereafter, "Re di Portogallo" and the Austrian ironclads exchanged broadsides for around half an hour before the Austrians engaged "Affondatore". The latter scored three hits on "Don Juan d'Austria"s unarmored bow, but these shots caused little damage. The melee which followed Tegetthoff's second pass was to his advantage, as the Austrian commander wished to rely upon ramming tactics in order to compensate for the Regia Marina's advantage in ironclads and the Imperial Austrian Navy's inferior guns. Indeed, the ensuing melee was so chaotic that the Italian ironclad "Regina Maria Pia" collided with her sister ship "San Martino", damaging the latter's ram bow. The melee further hampered Italian efforts to use their superior numbers against the Austrians when the ironclad "Ancona" became entangled with the coastal defense ship "Varese", allowing a group of Austrian wooden ships to escape the engagement unharmed.

By this time, "Palestro" was burning badly from her engagement with "Drache" and from 15 broadsides fired by "Kaiser Max", and was soon destroyed by a magazine explosion. Persano broke off the engagement, having lost two ships, and though his squadron still outnumbered the Austrians, he refused to counter-attack with his badly demoralized forces. In addition, the fleet was low on coal and ammunition. The Italian fleet began to withdraw, followed by the Austrians; Tegetthoff, having gotten the better of the action, kept his distance so as not to risk his success. Additionally, the Austrian ships were slower than their Italian counterparts, and so they could not force a second engagement. As night began to fall, the opposing fleets disengaged completely, heading for Ancona and Pola, respectively. In the course of the battle, the Imperial Austrian Navy only suffered 38 killed, compared to the 612 dead among the ranks of the Regia Marina.

The day after the Battle of Lissa, Tegetthoff was promoted by Emperor Franz Joseph I to the rank of vice admiral. Meanwhile, Admiral Persano claimed Lissa was an Italian victory despite the Italians losing two ironclads and failing to sink or capture a single Austrian ship. Shortly after returning to Ancona with his fleet on 21 July however, Persano saw his story fall apart as the truth about the battle's results swiftly turned public opinion about the conduct of the Regia Marina against the Italian commander. As an Italian Senator, Persano saw the Senate of the Kingdom of Italy place him on political trial in April 1867 and ultimately forced the admiral to retire in disgrace.

Despite the Austrian victory at Lissa, the Seven Weeks War would ultimately be decided on land. The decisive Battle of Königgrätz had occurred earlier in the month, resulting in heavy Austrian casualties and signaling Prussia's eventual victory over Austria in the war. Just six days after the Battle of Lissa, Austria and Prussia signed a preliminary peace agreement at Nikolsburg. With Austrian dominance of the Adriatic Sea confirmed, and with reinforcements arriving on the Italian front from Germany, Austria's negotiating position with the Italians improved significantly and Italy was thus forced to sign the Armistice of Cormons on 12 August. Under the terms of the subsequent Treaty of Vienna, signed on 12 October, Italy gained possession of Venetia, but nothing else from the Austrian Empire.

The battle of Lissa proved to be the climax of the Austro-Italian ironclad arms race, though the naval competition between the two nations would continue for another 16 years. Following the signing of the Treaty of Vienna, Austria was diplomatically isolated which caused a considerable amount of uncertainty over the future of its naval forces. Tegetthoff however was widely praised for his performance at Lissa. In addition to being promoted and receiving the Military Order of Maria Theresa on behalf of the Austrian Empire, Emperor Maximilian I of Mexico, who had overseen the construction of Austria's entire ironclad fleet as Archduke Ferdinand Max, congratulated Tegetthoff for his victory and awarded the Austrian vice admiral the "Grand Cross of the Imperial Order of Our Lady of Guadalupe", the highest Imperial Order that could be bestowed by the Mexican Emperor.

Despite its relatively limited impact on the outcome of the Seven Weeks War, the Battle of Lissa would prove to have a major impact on the development of naval warfare for the next 60 years. As the first naval engagement between multiple armored warships in history, the Battle of Lissa would be the largest fleet engagement to occur in the century between the Battle of Trafalgar and the Battle of Tsushima. Most of the world's major navies adopted Tegetthoff's ramming tactics and subsequently incorporated ram bows onto warships well into the 1920s.

In the years after the Battle of Lissa, the Regia Marina fell into an era of steep decline. Having already having overspent its naval budgets by millions of lira in the years before Lissa, the Regia Marina saw its budget cut throughout the 1860s and 1870s. With Austrian control over the Adriatic Sea solidified following the Seven Weeks War, it entered the post-war era in a state of political and financial disarray as most of the Regia Marina's leadership, including Persano, had been disgraced by the Battle of Lissa and the failure to achieve any naval gains in the Adriatic.

In the autumn of 1867, Menabrea, who had previously been the primary objector to the construction of Italy's ironclad battle fleet after Cavour's death in 1861, came to power as Prime Minister of Italy. Meanbrea continued his record of opposing ironclad warships and scrapped all plans to construct new ships which had not already been ordered shortly after taking office. These events caused construction of new ironclad warships to come to a halt after the competition of the "Principe Amedeo" class. Italy did not lay down another ironclad until 1873.

Austria's defeat in the Seven Weeks War forced Austria to determine a new set of foreign and domestic policies for the future, as Austria's interests since the days of the Holy Roman Empire had primarily been found in Italy and Germany. The Empire thus reformed itself into the Austria-Hungarian Empire following the adoption of the Austro-Hungarian Compromise of 1867 (German: "Ausgleich"), which re-established the sovereignty of the Kingdom of Hungary and placed Hungarians within the Empire on an equal footing with Austrians. Under the "Ausgleich", Emperor Franz Joseph I would be crowned as King of Hungary, while a separate parliament at Pest with powers to enact laws for the lands of the Holy Crown of Hungary would be established.

From 1867 onwards, the abbreviations heading the names of official institutions in Austria-Hungary reflected their responsibility: (German: "" or Imperial and Royal) was the label for institutions common to both parts of the Monarchy. This meant that following the transformation of the Austrian Empire into the Austro-Hungarian Empire, the Imperial Austrian Navy was itself reformed into the Imperial and Royal Navy (German: "kaiserliche und königliche Kriegsmarine"), though the navy was commonly referred to either as the "k.u.k. Kriegsmarine" or simply the "Austro-Hungarian Navy".

Seizing upon the decline of the Regia Marina in the years immediately after the Battle of Lissa, Tegetthoff worked to continue the efforts of Archduke Ferdinand Max of expanding the ironclad fleet of the now Austro-Hungarian Navy. Tegetthoff found political allies in the Austro-Hungarian Minister of War Carl von Franck and retired Admiral Bernhard von Wüllerstorf-Urbair. Wüllerstorf's and Franck's primary arguments in favor of continuing with the ironclad program Austria had engaged in prior to the Seven Weeks War lay largely along economic grounds. The two believed that constructing new ironclad warships would rejuvenate Austria-Hungary's economy following the defeat at the hands of Prussia and Italy, and that such a fleet would help to open up new commercial opportunities in the Levant and the Middle East. These proposals would be shelved however while Austria continued to reel from the military defeats inflicted by Prussia, and several cabinet reshufflings by Emperor Franz Joseph I resulted in a government more interested in pursuing revenge against Prussia than constructing new ironclads, which would be of little use in a hypothetical second war with Prussia.

Nevertheless, in the first budget passed following the "Ausgleich", funds were appropriated to renovate and upgrade Austria-Hungary's oldest ironclads, "Drache" and "Salamander". Additional funds were set aside to re-arm the entire fleet with new RML guns from the United Kingdom. Furthermore, the first post-war ironclad of the Austro-Hungary Navy,, was laid down at the Stabilimento Tecnico Triestino shipyard in San Marco in June 1867. As part of the post-"Ausgleich" reforms, Austria-Hungary attempted to court France and Italy as potential allies to curb future Prussian expansion. This potential alliance and a re-orientation of Austro-Hungarian foreign policy back towards Germany threatened the development of the Austro-Hungarian Navy and thus the construction of additional ironclads, though the talks ultimately failed after France and Italy could not agree on the Roman Question.

Tegetthoff followed up on this progress with a new proposal for the 1870 budget, which would establish fixed annual budgets similar to the German Naval Laws that German Secretary of State for the Navy, Alfred von Tirpitz, would establish near the turn of the century. This time however, Tegetthoff emerged from the political debates in Vienna and Pest with only a partial victory. While the Austro-Hungarian Navy's 1870 budget was increased to 9,800,000 Florins, the delegations rejected the "Marinekommandant"s proposal for a fixed naval budget, and no additional funds were allocated for new ironclads. These budgetary restraints would result in "Erzherzog Albrecht" being built to a slightly smaller design than "Custoza". Nevertheless, in the four years since the Battle of Lissa, the Austro-Hungarian Navy had begun work on three new ironclads, and the older ship-of-the-line "Kaiser" had been converted into a casemate ironclad.

While Tegetthoff spent most of 1870 observing the Franco-Prussian War and securing funds to rush completion of the ironclads already under construction, the new ironclads Austria-Hungary was constructing had begun to bring Tegetthoff close to his ambitious goal of 15 armored warships by 1878. However, after obtaining new funds in January 1871 to speed up the acquisition of the British-made armor plating of "Custoza" and "Erzherzog Albrecht", Tegetthoff's health failed rapidly. Catching pneumonia after walking home in a rainstorm, Tegetthoff died in April 1871. His death would also mark a period of substantial decline for the Austro-Hungarian Navy, as Europe's changing political outlook in the face of the recently concluded Franco-Prussian War, combined with improved Austro-Italian relations in the decade to come, severely undermined future arguments for the expansion of the Austro-Hungarian Navy.

Tegetthoff's successor to the office of "Marinekommandant" was his old political rival, Friedrich von Pöck. While he commanded the ship-of-the-line "Kaiser" in the Second Schleswig War, Pöck had been given shore assignments throughout the Seven Weeks War, denying him the same sort of fame and public admiration that Tegetthoff had enjoyed after the Battle of Lissa. Almost immediately after taking office, Pöck faced chronic budgetary problems, owing in large part due to obstructionism from Hungarians and liberal Germans within the Austro-Hungarian government, the former viewing naval matters as an Austrian concern, and the latter opposed to naval expansion in light of the continued deterioration of the Regia Marina following the Battle of Lissa. Additionally, since he was not involved in Tegetthoff's victory at the Battle of Lissa, he lacked the personal prestige to command the respect of the government, which Tegetthoff had successfully used to secure the construction of four ironclads in the four years since the Seven Weeks War. As a result, Pöck had great difficulty securing the funding for new ironclad warships during his tenure.

Pöck finally won approval for a new ironclad,, in 1875 but he could not convince the delegations to allocate funds for a sister ship he had planned to name "Erzherzog Karl". "Tegetthoff" was laid down in April 1876, the only ironclad to be constructed for the next eight years. Confronted with an unwillingness within the Austro-Hungarian government to strengthen the fleet further, Pöck resorted to subterfuge to acquire the funds he needed. In 1875, he asked for a budget increase to "rebuild" the three elderly "Kaiser Max"-class ironclads. In fact, Pöck sold the old ships for scrap, reusing only their machinery, armor plates, and other fittings for the construction of three new ships, which were given the same names to obscure his sleight of hand.

Austro-Hungarian Naval Budgets: 1867–1884
Throughout this period, the navy's annual budget continued to fall, from a peak of 11,100,000 Florins in 1872 to 8,500,000 Florins in 1880. Pöck continued to push for another new ironclad, but by 1880 his efforts were only symbolic: in his proposed budget estimates for the year, he included a new ironclad warship, but did not actually allocate any funds for it. Unable to increase the strength of the ironclad fleet, Pöck turned to less expensive means to defend Austria-Hungary's coastline, including development of naval mines and self-propelled torpedoes. He ordered the first torpedo boat, "Torpedoboot I", from Britain in 1875, followed by five more from Britain and four more from domestic shipyards thereafter. In the late 1870s and early 1880s, he also ordered the four torpedo cruisers,,, and.

These new orders marked not only a change in Austro-Hungarian naval policy, but also the end of the Empire's participation in the ironclad arms race, though two final ironclads would be built in 1884. Pöck succeeded in securing funding for the first of these two ships in 1881, having obtained authorization for to replace the aging ironclad "Salamander". The design for the new ship was prepared by Josef Kuchinka, the Director of Naval Construction and Romako's successor to the post. "Kronprinz Erzherzog Rudolf" was laid down in January 1884.

A second ironclad and Austria-Hungary's last,, was authorized shortly thereafter by Pöck's successor, Maximilian Daublebsky von Sterneck. Sterneck ultimately had to resort to the same budgetary tricks employed earlier by Pöck in order to construct "Kronprinzessin Erzherzogin Stephanie". She was laid down in November 1884 using funds that had been allocated to modernize the ironclad "Erzherzog Ferdinand Max". Sterneck attempted to conceal the deception by referring to the ship officially as "Ferdinand Max", though the actual "Ferdinand Max" was still anchored in Pola as a school ship. Eventually the "fait accompli" of the ironclad's construction was accepted by the delegations and the new ship was commissioned under the name "Kronprinzessin Erzherzogin Stephanie" in July 1889. After the construction of these two final ironclads, nearly another decade would pass before the Austro-Hungarian Navy secured funding for new capital ships, the three s begun in 1893.

Italy's defeat at the Battle of Lissa continued to inhibit naval expansion in the 1870s. A naval commission convened in 1871 concluded that the Regia Marina's capabilities in the Adriatic and Mediterranean were so poor in comparison to Italy's neighbors that future Italian naval policy should be oriented more towards coastal defense than constructing a powerful battle fleet. The commission's findings recommended future funds should be diverted away from further ironclads and towards establishing over 30 coastal forts instead. These findings resulted in the Italy's 1871 naval budget being cut to 26,800,000 lira, the lowest amount ever afforded to the Regia Marina in the years after Lissa. Incidentally, the 1871 budget would also mark the only time in history where the Regia Marina received less funds than the Austro-Hungarian Navy. The 1871 budget would signal the nadir of Italian naval fortunes however, as subsequent budgets would slowly rise throughout the 1870s as newly appointed naval engineer Benedetto Brin worked to rebuild the Regia Marina.

Italian Naval Budgets: 1874–1880
Before either of these ships were even launched however, the Chamber of Deputies agreed to the construction of two additional ironclads to accompany the "Caio Duilio" class. The s would prove to be among the largest ironclad warships in the world at the time of their commissioning. The "Italia" class consisted of the ironclads and. Both ships were designed by Brin, who chose to discard traditional ironclad belt armor entirely, relying instead on a combination of very high speed and extensive internal subdivision to protect the ships.

As the second class in Italy's new warship program designed to give the Regia Marina favorable numbers over the Austro-Hungarian Navy, the "Italia" class not only presented Italy's desire to rebuild its naval power following the Battle of Lissa, but it also signaled an era of changing technology which would soon put the ironclad arms race between Italy and Austria-Hungary, and indeed the ironclad itself, to an end. The design of the "Italia" class, such as their speed, light armor, and armament of very large guns, has led some naval historians to refer to the "Italia" class as prototypical battlecruisers, blurring the lines between "ironclads" and the future warships which would come to dominate the early 20th century. "Italia" was laid down at Regio Cantiere di Castellammare di Stabia in January 1876, while Cantiere navale fratelli Orlando began construction on "Lepanto" in November that same year.

After his success with designing and obtaining the necessary money to construct the "Caio Duilio" and "Italia"-class ironclads, Brin was appointed Italian Minister of the Navy in March 1876. After taking office, he began drawing up plans for a major fleet expansion, the largest in Italian history. Brin envisioned a modern Regia Marina of 16 ironclads, 10 cruisers, and 46 smaller warships. The project would take a decade to implement and cost 146 million lira. Brin obtained the support of King Victor Emmanuel II for the plan in November 1876, and nine months later the Chamber of Deputies approved the package, including multiple internal reforms within the Regia Marina designed to save money for the implementation of Brin's plan, including the decommissioning and scrapping of several older warships. By the time "Italia" was commissioned into the Regia Marina in October 1885, all three ships of the "Principe di Carignano" class, as well as the ironclad "Re di Portogallo", had either been broken up or decommissioned.

Political and technological developments throughout the 1870s and 1880s would ultimately bring the naval arms race, which Austria-Hungary and Italy had been engaged in for roughly 20 years, to a close. The primary political and technological drivers of this would be the signing of the Triple Alliance in 1882, and the emergence of the pre-dreadnought battleship.

Italy would construct two more classes of ironclads, the and the. However, by the time, the first ship of her namesake class, was laid down by Regio Cantiere di Castellammare di Stabia on 3 August 1881, the ironclad arms race between Italy and Austria-Hungary was coming to an end. The completion of in February 1895, the final ironclad of the Regia Marina, gave Italy the third largest navy in the world, behind only the United Kingdom and France. Despite this, by the time the final ships of the "Re Umberto" class had been completed, the United Kingdom had already begun building the s, the first pre-dreadnought battleships, which rendered older ironclad battleships obsolete. In addition, technological progress, particularly in armor production techniques—first Harvey armor and then Krupp armor—contributed to the ships' rapid obsolescence.

By the 1880s, the concept of the ironclad was giving way to that of the battleship. This decade marked the beginning of the era of the "Pre-dreadnought battleship", sea-going battleships built between the mid- to late 1880s and 1905. The distinction however between the era of the ironclad and the era of the pre-dreadnought is blurred by the fact that ironclad designs evolved into battleships over time. This can be seen in the outline of the last ironclads build by Austria-Hungary and Italy, which when contrasted with each nation's oldest ironclads, illustrate major differences in design and construction. The ironclads and pre-dreadnoughts of the 1870s and 1880s were largely built from steel, and protected by hardened steel armor, as opposed to the iron plating and casemate designs of older ironclads. The distinctions between later ironclads and pre-dreadnought battleships can also be found in the armament and propulsion systems of each ship. Pre-dreadnoughts carried a main battery of very heavy guns in barbettes in either open or armored gunhouses which were supported by one or more secondary batteries of smaller guns. They were also powered by coal-fuelled triple-expansion steam engines.

The distinction between ironclads and pre-dreadnought battleships became blurred in foreign navies outside of Italy and Austria-Hungary as well, most notably in the British Royal Navy with the, ordered in 1880. These ships reflected developments in ironclad design, being protected by iron-and-steel compound armor rather than wrought iron. Equipped with breech-loading guns, the Admirals continued the trend of ironclad warships towards gigantic weapons. The guns were mounted in open barbettes to save weight. Some historians see these ships as a vital step towards pre-dreadnoughts; others view them as a confused and unsuccessful design.

In contrast to the chaotic development of ironclad warships in preceding decades, the 1890s saw navies worldwide start to build battleships to a common design as dozens of ships essentially followed the design of the British. The similarity in appearance of battleships in the 1890s was underlined by the increasing number of ships being built. New naval powers such as Germany, Japan, the United States, and Italy and Austria-Hungary, began to establish themselves with fleets of pre-dreadnoughts, while the navies of the United Kingdom, France, and Russia expanded to meet these new threats. The decisive clash of pre-dreadnought fleets was between the Imperial Russian Navy and the Imperial Japanese Navy during the Battle of Tsushima in 1905.

The pre-dreadnoughts themselves would later be made obsolete by the arrival of in 1906. "Dreadnought" followed the trend in battleship design to heavier, longer-ranged guns by adopting an "all-big-gun" armament scheme of ten 12-inch guns. Her innovative steam turbine engines also made her faster. The existing pre-dreadnoughts were decisively outclassed, and new and more powerful battleships were from then on known as dreadnoughts while the ships that had been laid down before were designated as pre-dreadnoughts.

The changing nature of political alliances in the 1880s also spelled the end of the arms race. For 20 years, both Italy and Austria-Hungary had used the threat of the other to justify engaging in constructing and purchasing numerous ironclad warships. However, following the first dissolution of the League of the Three Emperors in 1878, Austro-Hungarian Foreign Minister Baron Heinrich Karl von Haymerle began negotiations with Rome to improve relations between Italy and Austria-Hungary. Pöck argued strongly against improving relations with Italy, recognizing that a friendly Italy would effectively render all arguments for a sea-going Austro-Hungarian Navy largely pointless. Nevertheless, Italian foreign policy views since the 1860s had altered considerably, and Italy's attention had since turned away from Tyrol and Trieste and instead towards North Africa. In an attempt to redirect Italian territorial ambitions away from Austria-Hungary, Haymerle encouraged Italian claims on Tunis, and promised Austria-Hungary's diplomatic support for Italian colonial plans in North Africa in exchange for Italian guarantees to respect Austro-Hungarian influence in the Balkans.

Italy was further distracted from Austria-Hungary and the naval arms race between the two nations when France established a protectorate over Tunisia in May 1881. Italy had coveted the Beylik of Tunis as part of its own colonial ambitions. Anti-French sentiment subsequently gripped the Italian public, press, and politicians, but lacking any allies, Italy was powerless to stop the incorporation of Tunisia into the French colonial empire. As a result, Austro-Hungarian attempts to improve relations with Italy began to be warmly received in Rome, eventually leading to a visit to Vienna by King Umberto I in October 1881. This was followed up with the signing of the Triple Alliance between Italy, Austria-Hungary, and Germany in May 1882.

Italy would continue to build up its naval force in the years after the singing of the Triple Alliance, but the terms of the treaty led Italy to concede the Adriatic Sea to the interests of Austria-Hungary. Instead, Italian naval plans were redirected towards France. Brin's naval program thus went forward within the Regia Marina, but Italian attentions were redirected to the Western Mediterranean and Tyrrhenian Sea. For Austria-Hungary, the Triple Alliance ended the threat of Italian irridentism aimed at many of its coastal possessions, gave the Empire a relatively free hand in the Adriatic, and protected two of Austria-Hungary's land borders in the event of a war with Russia. However, the results of the alliance would prove to be disastrous for the Austro-Hungarian Navy. The lack of a strong potential opponent determined to contest the Adriatic Sea eliminated most arguments in favor of a large fleet. Indeed, it would not be until 1893 before the Austro-Hungarian Navy would construct another class of capital ships.

Even after Italy and Austria-Hungary became allies under the Triple Alliance however, mutual suspicions and areas of conflict remained between both nations. Italy would go on to improve its relations with France after 1902, negating one of the key issues which led to it joining the Triple Alliance in the first place. Furthermore, enduring nationalism among Italians within Austria-Hungary, and Italian irredentist claims of important Austrian territories, such as Tyrol and Trieste, continued to concern Austria-Hungary. Likewise, Italy grew worried at the naval expansion Austria-Hungary engaged in at the onset of the 20th century, particularly under "Marinekommandant" Hermann von Spaun and later under Rudolf Montecuccoli. These trends would spark a second naval arms race centered around the construction of battleships at the turn of the century, which would later intensify considerably in the years leading up to World War I.

The pretext for the conflict was found in the dispute between Prussia and Austria over the administration of Schleswig-Holstein, which the two of them had conquered from Denmark and agreed to jointly occupy at the end of the Second Schleswig War in 1864. When Austria brought the dispute before the German Diet and also decided to convene the Diet of Holstein, Prussia declared that the Gastein Convention had thereby been nullified and invaded Holstein. When the German Diet responded by voting for a partial mobilization against Prussia, Bismarck claimed that the German Confederation was ended. Crown Prince Frederick "was the only member of the Prussian Crown Council to uphold the rights of the Duke of Augustenburg and oppose the idea of a war with Austria which he described as "fratricide"". Although he supported unification and the restoration of the medieval empire, "Fritz could not accept that war was the right way to unite Germany."

Austro-Prussian War

The Austro-Prussian War or Seven Weeks' War (also known as the Unification War, the War of 1866, or the Fraternal War, in Germany as the German War, and also by a variety of other names) was a war fought in 1866 between the Austrian Empire and the Kingdom of Prussia, with each also being aided by various allies within the German Confederation. Prussia had also allied with the Kingdom of Italy, linking this conflict to the Third Independence War of Italian unification. The Austro-Prussian War was part of the wider rivalry between Austria and Prussia, and resulted in Prussian dominance over the German states.

The major result of the war was a shift in power among the German states away from Austrian and towards Prussian hegemony, and impetus towards the unification of all of the northern German states in a that excluded the German Austria. It saw the abolition of the German Confederation and its partial replacement by a North German Confederation that excluded Austria and the other South German states. The war also resulted in the Italian annexation of the Austrian province of Venetia.

For several centuries, Central Europe was split into a few large- or medium-sized states and hundreds of tiny entities, which while ostensibly being within the Holy Roman Empire ruled by the Holy Roman Emperor, operated in a largely independent fashion. When an existing Emperor died seven secular and ecclesiastical princes would elect a new Emperor. Over time the Empire became smaller and by 1789 came to consist of primarily German peoples (aside from Bohemia, Tyrol, the southern Netherlands and Slovenia). Aside from five years (1740-1745), the Habsburg family, whose personal territory was Austria, controlled the Emperorship from 1440 to 1806, although it became increasingly ceremonial only as Austria found itself at war at certain times with other states within the Empire, such as Prussia, which in fact defeated Austria during the War of Austrian Succession to seize the state of Silesia in 1742. While Austria was traditionally considered the leader of the German states, Prussia became increasingly powerful and by the late 18th century was ranked as one of the great powers of Europe. Francis II's abolition of the office of Holy Roman Emperor in 1806 also deprived him of his imperial authority over most of German-speaking Europe, though little true authority remained by that time; he did, however, retain firm control of an extensive multi-ethnic empire (most of it outside the previous boundaries of the Holy Roman Empire). After 1815, the German states were once again reorganized into a loose confederation: the German Confederation, under Austrian leadership.

Partly in reaction to the triumphant French nationalism of Napoleon I and partly as an organic feeling of commonality glorified during the Romantic era, German nationalism became a potent force during this period. The ultimate aim of most German nationalists was the gathering of all Germans under one state, although most accepted that the German portions of Switzerland would remain in Switzerland. Two ideas of national unity eventually came to the fore – one including and one excluding Austria.

"The New York Times" summarized its views of German nationalism shortly after the outbreak of the war:

There are many interpretations of Otto von Bismarck's behaviour before the Austrian-Prussian war, which concentrate mainly on whether he had a master plan that resulted in this war, the North German Confederation and the unification of Germany. Bismarck maintained that he orchestrated the conflict in order to bring about the North German Confederation, the Franco-Prussian War and the eventual unification of Germany. However, historians such as A. J. P. Taylor dispute his interpretation and believe that Bismarck did not have a master plan, but rather was an opportunist who took advantage of the favourable situations that presented themselves. Taylor thinks Bismarck manipulated events into the most beneficial solution possible for Prussia.

On 22 February 1866, Count Karolyi, Austrian ambassador in Berlin, sent a dispatch to the Minister of Foreign Affairs, Count Alexander Mensdorff-Pouilly. He explained to him that Prussian public opinion had become extremely sensitive about the Duchies issue and that he had no doubt that "this artificial exaggeration of the danger by public opinion formed an essential part of the calculations and actions of Count Bismarck [who considered] the annexation of the Duchies... a matter of life and death for his political existence [and wished] to make it appear such for Prussia too."

Possible evidence can be found in Bismarck's orchestration of the Austrian alliance during the Second Schleswig War against Denmark, which can be seen as his diplomatic "masterstroke". Taylor also believes that the alliance was a "test for Austria rather than a trap" and that the goal was not war with Austria, contradicting what Bismarck later gave in his memoirs as his main reason for establishing the alliance. It was in the Prussian interest to gain an alliance with Austria to defeat Denmark and settle the issue of the duchies of Schleswig and Holstein. The alliance can be regarded as an aid to Prussian expansion, rather than a provocation of war against Austria. Many historians believe that Bismarck was simply a Prussian expansionist, rather than a German nationalist, who sought the unification of Germany. It was at the Gastein Convention that the Austrian alliance was set up to lure Austria into war.

Bismarck made an alliance with Italy, committing it to the war if Prussia entered one against Austria within three months, which was an obvious incentive for Bismarck to go to war with Austria within three months to divert Austrian strength away from Prussia. The timing of the declaration was perfect, because all other European powers were either bound by alliances that forbade them from entering the conflict, or had domestic problems that had priority. Britain had no stake economically or politically in war between Prussia and Austria. Russia was unlikely to enter on the side of Austria, due to ill will over Austrian support of the anti-Russian alliance during the Crimean War and Prussia had stood by Russia during the January Uprising in Poland whereas Austria had not.

France was also unlikely to enter on the side of Austria, because Bismarck and Napoleon III met in Biarritz and allegedly discussed whether or not France would intervene in a potential Austro-Prussian war. The details of the discussion are unknown but many historians think Bismarck was guaranteed French neutrality in the event of a war. Italy was already allied with Prussia, which meant that Austria would be fighting both with no major allies of its own. Bismarck was aware of his numerical superiority but still "he was not prepared to advise it immediately even though he gave a favourable account of the international situation".

When the Prussian victory became clear, France attempted to extract territorial concessions in the Palatinate and Luxembourg. In his speech to the Reichstag on 2 May 1871, Bismarck said:

Unpopular rulers sought foreign war as a way to gain popularity and unite the feuding political factions. In Prussia King William I was deadlocked with the liberal parliament in Berlin. In Italy King Victor Emmanuel II faced increasing demands for reform from the Left. In Austria Emperor Franz Joseph saw the need to reduce growing ethnic strife by uniting the several nationalities against a foreign enemy.

Bismarck may well have been encouraged to go to war by the advantages of the Prussian army against the Austrian Empire. Taylor wrote that Bismarck was reluctant to pursue war as it "deprived him of control and left the decisions to the generals whose ability he distrusted". (The two most important personalities within the Prussian army were the War Minister Albrecht Graf von Roon and Chief of the General Staff Helmuth Graf von Moltke.) Taylor suggested that Bismarck was hoping to force Austrian leaders into concessions in Germany, rather than provoke war. The truth may be more complicated than simply that Bismarck, who famously said that "politics is the art of the possible", initially sought war with Austria or was initially against the idea of going to war with Austria.

In 1862, von Roon had implemented several army reforms that ensured that all Prussian citizens were liable to conscription. Before this date, the size of the army had been fixed by earlier laws that had not taken population growth into account, making conscription inequitable and unpopular for this reason. While some Prussian men remained in the army or the reserves until they were forty years old, about one man in three (or even more in some regions where the population had expanded greatly as a result of industrialisation) was assigned minimal service in the "Landwehr", the home guard.

Introducing universal conscription for three years increased the size of the active duty army and provided Prussia with a reserve army equal in size to that which Moltke deployed against Austria. Had France under Napoleon III attempted to intervene against the Prussians, they could have faced him with equal or superior numbers of troops.

Prussian conscript service was one of continuous training and drill, in contrast to the Austrian army where some commanders routinely dismissed infantry conscripts to their homes on permanent leave soon after their induction into the army, retaining only a cadre of long-term soldiers for formal parades and routine duties. Austrian conscripts had to be trained almost from scratch when they were recalled to their units on the outbreak of war. The Prussian army was thus better trained and disciplined than the Austrian army, particularly in the infantry. While Austrian cavalry and artillery were as well-trained as their Prussian counterparts with Austria possessing two elite divisions of heavy cavalry, weapons and tactics had advanced since the Napoleonic Wars and cavalry charges had been rendered obsolete.

The Prussian army was locally based, organized in "Kreise" (military districts, lit.: circles), each containing a Korps headquarters and its component units. Most reservists lived close to their regimental depots and could be swiftly mobilized. Austrian policy was to ensure that units were stationed far from home to prevent them from taking part in separatist revolts. Conscripts on leave or reservists recalled to their units during mobilization faced a journey that might take weeks before they could report to their units, making the Austrian mobilization much slower than that of the Prussian Army.

The railway system of Prussia was more extensively developed than that within Austria. Railways made it possible to supply larger numbers of troops than hitherto and allowed the rapid movement of troops within friendly territory. The better Prussian rail network allowed the Prussian army to concentrate more rapidly than the Austrians. Moltke, reviewing his plans to Roon stated, "We have the inestimable advantage of being able to carry our Field Army of 285,000 men over five railway lines and of virtually concentrating them in twenty-five days.... Austria has only one railway line and it will take her forty-five days to assemble 200,000 men." Moltke had also said earlier, "Nothing could be more welcome to us than to have now the war that we must have."

The Austrian army under Ludwig von Benedek in Bohemia (the present-day Czech Republic) might previously have been expected to enjoy the advantage of the "central position", by being able to concentrate on successive attacking armies strung out along the frontier, but the quicker Prussian concentration nullified this advantage. By the time the Austrians were fully assembled, they would be unable to concentrate against one Prussian army without having the other two instantly attack their flank and rear, threatening their lines of communication.

Prussian infantry were equipped with the Dreyse needle gun, a bolt-action rifle capable of far more rapid fire than the muzzle-loading Lorenz rifles of the Austrian army. In the Franco-Austrian War of 1859, French troops had taken advantage of the fact that the rifles of the time fired high if sighted for long range. By rapidly closing the range, French troops could come to close quarters without sustaining too many casualties from the Austrian infantry. After the war, the Austrians had adopted the same methods, which they termed the ("shock tactics"). Although they had some warnings of the Prussian weapon, they ignored these and retained. The Austrian artillery had breech-loading rifled guns, while the Prussian army retained many muzzle-loading smooth bore cannon. New Krupp breech-loading cannons were only slowly being introduced but the shortcomings of the Austrian army prevented the artillery from being decisive.

In 1866, the Prussian economy was rapidly growing, partly as a result of the "Zollverein", which gave Prussia an advantage in the war. Prussia could equip its armies with breech-loading rifles and later with new Krupp breech-loading artillery but the Austrian economy was suffering from the effects of the Hungarian Revolution of 1848 and the Second Italian War of Independence. Austria had only one bank, the Creditanstalt and the state was heavily in debt. Historian Christopher Clark wrote that there is little to suggest that Prussia had an overwhelming economic and industrial advantage over Austria and wrote that a larger portion of the Prussian population was engaged in agriculture than in the Austrian population and that Austrian industry could produce the most sophisticated weapons in the war (rifled artillery). The Austro-Prussian War ended quickly and was fought mainly with existing weapons and munitions, which reduced the influence of economic and industrial power relative to politics and military culture.

Before the war started both the Austrian and Prussian governments sought to rally allies in Germany. On 15 June Bismarck offered territorial compensation in the Grand Duchy of Hesse to the Electorate of Hesse, if Elector Frederick William were to ally with Prussia. The proposition grievously offended Frederick William's "legitimist sensibilities" and the monarch joined the Austrians, despite the Hessian Landtag voting for neutrality. King George V of Hanover during the spring of 1866 was contacted by Austrian Emperor Franz Joseph about establishing a coalition against the Prussians. The Hanoverian monarch concluded that his kingdom would fall if it were to fight against the Prussian armies.

Most of the southern German states sided with Austria against Prussia, even though Austria had declared war. Those that sided with Austria included the Kingdoms of Saxony, Bavaria, Württemberg, and Hanover. Southern states such as, Baden, Hesse-Kassel (or Hesse-Cassel), Hesse-Darmstadt, and Nassau also joined with Austria. Many of the German princes allied with the Habsburgs principally out of a desire to keep their thrones.

Some of the northern German states joined Prussia, in particular Oldenburg, Mecklenburg-Schwerin, Mecklenburg-Strelitz, and Brunswick. The Kingdom of Italy participated in the war with Prussia, because Austria held Venetia and other smaller territories wanted by Italy to complete the process of Italian unification. In return for Italian aid against Austria, Bismarck agreed not to make a separate peace until Italy had obtained Venetia.

Notably, the other foreign powers abstained from this war. French Emperor Napoleon III, who expected a Prussian defeat, chose to remain out of the war to strengthen his negotiating position for territory along the Rhine, while the Russian Empire still bore a grudge against Austria from the Crimean War.

The first war between two major continental powers in seven years, it used many of the same technologies as the Second Italian War of Independence, including railways to concentrate troops during mobilization and telegraphs to enhance long-distance communication. The Prussian Army used von Dreyse's breech-loading needle gun, which could be rapidly loaded while the soldier was seeking cover on the ground, whereas the Austrian muzzle-loading rifles could only be loaded slowly, and generally from a standing position.

The main campaign of the war occurred in Bohemia. Prussian Chief of General Staff Helmuth von Moltke had planned meticulously for the war. He rapidly mobilized the Prussian army and advanced across the border into Saxony and Bohemia, where the Austrian army was concentrating for an invasion of Silesia. There, the Prussian armies, led nominally by King William I, converged, and the two sides met at the Battle of Königgrätz (Hradec Králové) on 3 July. The Prussian Elbe Army advanced on the Austrian left wing, and the First Army on the center, prematurely; they risked being counter-flanked on their own left. Victory therefore depended on the timely arrival of the Second Army on the left wing. This was achieved through the brilliant work of its Chief of Staff, Leonhard Graf von Blumenthal. Superior Prussian organization and élan decided the battle against Austrian numerical superiority, and the victory was near total, with Austrian battle deaths nearly seven times the Prussian figure. Austria rapidly sought peace after this battle.
Except for Saxony, the other German states allied to Austria played little role in the main campaign. Hanover's army defeated Prussia at the Second Battle of Langensalza on 27 June 1866, but, within a few days, they were forced to surrender by superior numbers. Prussian armies fought against Bavaria, Württemberg, Baden and the Hessian states on the river Main, reaching Nuremberg and Frankfurt. The Bavarian fortress of Würzburg was shelled by Prussian artillery, but the garrison defended its position until armistice day.

The Austrians were more successful in their war with Italy, defeating the Italians on land at the Battle of Custoza (24 June), and on sea at the Battle of Lissa (20 July). However, Italy's "Hunters of the Alps" led by Garibaldi defeated the Austrians at the Battle of Bezzecca on 21 July, conquered the lower part of Trentino, and moved towards Trento. The Prussian peace with Austria forced the Italian government to seek an armistice with Austria on 12 August. According to the Treaty of Vienna, signed on 12 October, Austria ceded Veneto to France, which, in turn, ceded it to Italy.In order to prevent "unnecessary bitterness of feeling or desire for revenge" and forestall intervention by France or Russia, Bismarck pushed King William I of Prussia to make peace with the Austrians rapidly, rather than continue the war in hopes of further gains. William had "planned to install both the crown prince of Hanover and the nephew of the elector of Hesse as titular grand dukes in small territorial residuals of their dynastic inheritance" by opposition in the government cabinet, including Crown Prince Frederick to the annexation of several German states. The Austrians accepted mediation from France's Napoleon III. The Peace of Prague on 23 August 1866 resulted in the dissolution of the German Confederation, Prussian annexation of many of Austria’s former allies, and the permanent exclusion of Austria from German affairs. This left Prussia free to form the North German Confederation the next year, incorporating all the German states north of the Main River. Prussia chose not to seek Austrian territory for itself, and this made it possible for Prussia and Austria to ally in the future, since Austria felt threatened more by Italian and Pan-Slavic irredentism than by Prussia. The war left Prussia dominant in German politics (since Austria was now excluded from Germany and no longer the top German power), and German nationalism would encourage the remaining independent states to ally with Prussia in the Franco-Prussian War in 1870, and then to accede to the crowning of King William of Prussia as German Emperor in 1871. The united German states would become one of the most influential of all the European powers.

In addition to war reparations, the following territorial changes took place:

The war meant the end of the German Confederation. Those states who remained neutral during the conflict took different actions after the Prague treaty:

The Austrian Chancellor Count Friedrich Ferdinand von Beust was "impatient to take his revenge on Bismarck for Sadowa". As a preliminary step, the with Hungary was "rapidly concluded". Beust "persuaded Francis Joseph to accept Magyar demands which he had until then rejected", but Austrian plans fell short of French hopes (e.g. Archduke Albrecht, Duke of Teschen proposed a plan which required the French army to fight alone for six weeks in order to allow Austrian mobilisation).
Victor Emmanuel II and the Italian government wanted to join this potential alliance, but Italian public opinion was bitterly opposed so long as Napoleon III kept a French garrison in Rome protecting Pope Pius IX, thereby denying Italy the possession of its capital (Rome had been declared capital of Italy in March 1861, when the first Italian Parliament had met in Turin). Napoleon III was not strictly opposed to this (in response to a French minister of State's declaration that Italy would never lay its hands on Rome, the Emperor had commented "You know, in politics, one should never say 'never) and had made various proposals for resolving the Roman Question, but Pius IX rejected them all. Despite his support for Italian unification, Napoleon could not press the issue for fear of angering Catholics in France. Raffaele de Cesare, an Italian journalist, political scientist, and author, noted that:

Another reason that Beust's desired "revanche" against Prussia did not materialize was the fact that, in 1870, the Hungarian Prime Minister Gyula Andrássy was "vigorously opposed".