Austro-Italian ironclad arms race
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-Hungarian Navy
Prior to the Austro-Hungarian Compromise of 1867, the Navy was referred to as the Imperial Austrian Navy or simply the Austrian Navy. It saw action in the French Revolutionary Wars, the Napoleonic Wars, the Second Egyptian–Ottoman War, the First and Second Wars of Italian Independence, the Second Schleswig War, and the Seven Weeks War as well as the simultaneous Third War of Italian Independence. Following Austria's defeat to Prussia and Italy during the Seven Weeks War, the Empire reformed itself into a dual monarchy with the Habsburg monarch ruling as Emperor of Austria over the western and northern half of the country that was the Austrian Empire, and as King of Hungary over the Kingdom of Hungary. The Austro-Hungarian Compromise of 1867 also transformed the Austrian Navy into the Austro-Hungarian Navy. Largely neglected by the Empire in its early years, the k.u.k. Kriegsmarine grew throughout the late 19th and early 20th centuries to become one of the largest navies in the Adriatic and Mediterranean Seas. By 1914 the k.u.k. Kriegsmarine had a peacetime strength of 20,000 personnel.
The k.u.k. Kriegsmarine saw action in the Boxer Rebellion, and the first shots of World War I were fired by the Austrian monitor "Bodrog", which bombarded Belgrade on 29 July 1914, the day after Austria-Hungary declared war on Serbia.