Safety and efficiency problems related to the gasoline engines of both submarines led the Navy to purchase new propulsion systems prior to World War I.

When facing defeat in October 1918, the Austro-Hungarian government transferred its navy to the newly formed State of Slovenes, Croats and Serbs to avoid having to hand its ships over to the Allied Powers.

Following the Armistice of Villa Giusti in November 1918, the U-1-class submarines were seized by Italian forces and subsequently granted to the Kingdom of Italy under the Treaty of Saint-Germain-en-Laye in 1920.

With the establishment of the Austrian Naval League in September 1904 and the appointment of Vice-Admiral Rudolf Montecuccoli to the posts of Commander-in-Chief of the Navy (German: Marinekommandant) and Chief of the Naval Section of the War Ministry (German: Chef der Marinesektion) the following month,[2][3] the Austro-Hungarian Navy began an expansion program befitting a great power.

Montecuccoli immediately pursued the efforts championed by his predecessor, Admiral Hermann von Spaun, and pushed for a greatly expanded and modernized navy.

[11] Popper, in particular, had high praise for Lake's designs, telling the American naval architect, "When I saw your plans I recognized that you had introduced valuable features that were better than mine, and also that you had actual experience building and operating submarines, so I went to the Emperor and asked his consent to substitute your type of boat for my own...Do you know, Mr. Lake, I have been responsible for the design of all other vessels built for the Austrian Navy during the [past] 25 years?

The naval historians David Dickson, Vincent O'Hara, and Richard Worth described the U-1 class as "obsolete and unreliable when completed and suffered from problems even after modifications".

This demonstrated perfectly that it is essential, both in war and peace times, for the commander of the submarine to know what is going on in his vicinity on the surface.Their design was initially in line with Austro-Hungarian naval policy,[17][1] which stressed coastal defense and patrolling of the Adriatic Sea.

[9][14] Following the onset of World War I, it became clear that Austro-Hungarian U-boats needed to be capable of offensive operations, namely raiding enemy shipping in the Adriatic and Mediterranean Seas.

The diving chamber was intended for manned underwater missions such as destroying ships with explosives and severing offshore telegraph cables,[18] as well as for exiting or entering the submarine during an emergency.

This diving chamber proved its usefulness during the sea trials of the U-1 class when the crew of one submarine forgot to bring their lunches on board before conducting an underwater endurance test.

The design also placed the diving tanks above the waterline of the cylindrical hull, which necessitated a heavy ballast keel for vertical stability and required flooding to be done by pumps.

While the sea trials for both submarines were underway, efforts were being made to conceal their results from the general public, and especially from the navies of foreign powers.

The Austro-Hungarian government attempted to keep the construction and testing of the boats a state secret, to the point of employing many of the same measures which the Navy was using with respect to the Tegetthoff-class battleships.

These measures were implemented and in February 1910 the level of secrecy surrounding the U-1 class was so great that a Uruguayan naval officer conducting a visit to Austria-Hungary was shown all of the Navy's warships with the explicit exception of its submarines.

[18][24][25] Indeed, the engine problems for both submarines were so significant that on multiple occasions their crews had to conduct emergency resurfacing to bring fresh air into the boats.

Austria-Hungary strongly opposed this, as a Serbian port on the Adriatic could drastically alter the balance of power in the region by serving as a Russian naval base.

Italy also feared that Austria-Hungary would one day annex Serbia, and thus gain more Adriatic coastline without any exchange of Italian-speaking territories such as Trentino or Trieste.

By the end of November 1912, the threat of conflict between Austria-Hungary, Italy, Serbia, and Russia, coupled with allegations of Serbian mistreatment of the Austro-Hungarian consul in Prisrena led to a war scare in the Balkans.

[31] By December 1912, the Austro-Hungarian Navy had, in addition to U-1 and U-2, a total of seven battleships, six cruisers, eight destroyers, 28 torpedo boats, and four submarines ready for combat.

[31] The crisis eventually subsided after the signing of the Treaty of London, which granted Serbia free access to the sea through an internationally supervised railroad, while at the same time establishing an independent Albania.

[7] In mid-1918, the U-1-class submarines were considered for service as minesweepers, as the diving chamber in the boats could allow divers to sever the anchoring cables of sea mines.

The National Council also called for Croatia and Dalmatia to be unified, with Slovene and Bosnian organizations pledging their loyalty to the newly formed government.

Thus Emperor Karl I's government in Vienna asked the newly formed State of Slovenes, Croats and Serbs for help maintaining the fleet stationed at Pola and keeping order among the navy.

[39] Emperor Karl I, still attempting to save the Empire from collapse, agreed to the transfer, provided that the other "nations" which made up Austria-Hungary could claim their fair share of the value of the fleet at a later time.

Furthermore, the State of Slovenes, Croats and Serbs had also not yet publicly rejected Emperor Karl I, keeping the possibility of reforming the Empire into a triple monarchy alive.

The transfer to the State of Slovenes, Croats and Serbs began on the morning of 31 October, with Rear Admiral (German: Konteradmiral) Miklós Horthy meeting representatives from the South Slav nationalities aboard his flagship, Viribus Unitis.

[42] Control over the ships in the harbor, and the head of the newly-established navy for the State of Slovenes, Croats and Serbs, fell to Captain Janko Vuković, who was raised to the rank of admiral and took over Horthy's old responsibilities as Commander-in-Chief of the Fleet.

[44] The State of Slovenes, Croats and Serbs attempted to hold onto their ships, but lacked the men and officers to do so as most sailors who were not South Slavs had already gone home.

At a conference at Corfu, the Allied Powers agreed the transfer of Austria-Hungary's navy to the State of Slovenes, Croats and Serbs could not be accepted, despite sympathy from the United Kingdom.