All the ships available for Home Defence were divided into the First, Second and Third Fleets, comprising eight battle squadrons of eight battleships each, together with their attendant cruiser squadrons, flotillas and auxiliaries. The First Fleet comprised a Fleet Flagship and four battle squadrons of ships ‘in full commission’ manned entirely with active service ratings, and therefore _always ready_. To form this Fleet it was necessary to base the former ‘Atlantic Fleet’ on Home Ports instead of on Gibraltar, and to base the battleships hitherto in the Mediterranean on Gibraltar instead of Malta. By this concentration an additional battle squadron of strong ships (_King Edwards_) was _always ready_ in Home waters. The Second Fleet consisted of two battle squadrons, also fully manned with active service ratings but having about 40 per cent. of these learning and requalifying in the gunnery, torpedo and other schools. This Fleet was termed, ‘in active commission’ because it could fight at any moment; but to realise its highest efficiency, it required to touch at its Home Ports, and march on board its balance crews from the schools. In all these six battle squadrons, containing with their cruiser squadrons every modern and middle-aged ship in the Navy, there was not to be found a single reservist. No mobilisation was therefore necessary to bring the whole of this force into action. The Third Fleet also consisted of two battle squadrons and five cruiser squadrons of our oldest ships. These were only manned by care and maintenance parties and required the Reserves to be called out before they could put to sea. In order to accelerate the mobilisation of the leading battle squadrons and certain cruisers of the Third Fleet a special class of the Reserve was now formed called the ‘Immediate Reserve,’ who received higher pay and periodical training, and were liable to be called up in advance of general mobilisation. Germany was adding a third squadron to the High Sea Fleet, thus increasing her _always ready_ strength from 17 to 25. We in reply, by the measures set out above and various others too technical for description here, raised our _always ready_ Fleet from 33 battleships to 49, and other forces in like proportion. On mobilisation the German figures would rise to 38; and the British at first to 57, and ultimately, as the new organisation was completed, to 65. The reader will not be able to understand the issues involved in the completion and mobilisation of the Fleets on the eve of the war unless this organisation is mastered. * * * * *