and Italian navies had existed for decades; in the late 1880s Italy boasted the third-largest fleet in the world, behind the French Navy and the British Royal Navy. While that disparity had been somewhat equalized with the Imperial Russian Navy and German Imperial Navy surpassing the Italian Navy in 1893 and 1894 respectively, by 1903 the balance began to shift towards Italy's favor with the Italians claiming 18 pre-dreadnoughts in commission or under construction compared to 6 Austro-Hungarian battleships. Following the construction of the final two s in 1903, the Italian Navy elected to construct a series of large cruisers rather than additional battleships. Furthermore, a major scandal involving the Terni steelworks' armor contracts led to a government investigation that postponed several naval construction programs for three years. These delays meant that the Italian Navy would not initiate construction on another battleship until 1909, and provided the Austro-Hungarian Navy with an opportunity to address the disparity between the two fleets. Austro-Italian naval arms race As late as 1903 the Italian advantage in naval arms appeared so large that the difficulty of Austria-Hungary catching up to the Italian Navy, much less surpassing it, appeared insurmountable. Events changed, however, with the revolution in naval technology created by the launch of the British in 1906 and the Anglo-German naval arms race that followed. The value of pre-dreadnought battleships declined rapidly and numerous ships in European navies were rendered obsolete, giving Austria-Hungary an opportunity to make up for past neglect in naval affairs. With an improved financial situation and budget from the Austro-Hungarian Compromise of 1867, and with Archduke Ferdinand and Admiral Montecuccoli both supportive of constructing a new class of modern battleships, the stage was set for the development of Austria-Hungary's first and only class of dreadnought battleships. Shortly after assuming command as Chief of the Navy, Montecuccoli drafted his first proposal for a modern Austrian fleet in the spring of 1905. It was to consist of 12 battleships, 4 armored cruisers, 8 scout cruisers, 18 destroyers, 36 high seas torpedo craft, and 6 submarines. While these plans were ambitious, they lacked any ships the size of the Tegetthoff class. Additional proposals came from outside the Naval Section of the War Ministry. The Slovenian politician and prominent Trialist Ivan Šusteršič presented a proposal to the Reichsrat in 1905 calling for the construction of nine additional battleships. The Austrian Naval League also presented its