The Commonwealth of Australia was formed on 1 January 1901 by a Federation of the six self governing British colonies of Australia. Five of them had maintained naval forces, which were amalgamated into the Commonwealth Naval Forces on 1 March 1901. It was granted the title of Royal Australian Navy on 10 July 1911.
In August 1914 the RAN consisted of the battlecruiser HMAS Australia, the light cruisers HMAS Pioneer, Encounter, Melbourne and Sydney, the destroyers HMAS Parramatta, Warrego and Yarra and the submarines HMAS AE1 and AE2. All were modern ships built for the RAN in British yards to British designs, except for Encounter and Pioneer, old light cruisers transferred from the Royal Navy in 1912.
Warrego was built in Britain but then dismantled and the parts sent to Australia so that Australian shipyard workers could reassemble her and obtain expertise in warship construction. In August 1914 a light cruiser, HMAS Brisbane, and three destroyers, HMAS Huon, Swan and Torrens, were under construction in Australia.
Another old British cruiser, HMS Psyche, was in New Zealand waters. The battlecruiser HMS New Zealand was paid for by New Zealand taxpayers, but was part of the RN and was based in the UK in 1914.
At the outbreak of war the RAN was put under the control of the British Admiralty. Its initial missions were to capture German South Pacific colonies and to protect shipping against the German East Asia Squadron. The higher positions were held by British officers, as it would take time until Australians were ready to hold them. Rear Admiral Sir George Patey RN commanded the Australian Fleet.
The first British Empire shot of the First World War was fired by an Australian coastal defence battery. At 12:45 pm on 5 August 1914, Sergeant John Purdue of the Royal Australian Garrison Artillery fired a warning shot across the bows of SS Pfalz, a German merchant ship attempting to leave Melbourne harbour.
A significant Australian contribution to the war at sea came on 11 August when the German merchant ship SS Hobart was boarded and her code books seized, although they did not reach the Admiralty in London until October.
On 6 August the British Government sent the Australian Government the following telegram:
If your Ministers desire and feel themselves able to seize German wireless stations at Yap in Marshall Islands, Nauru, Pleasant Island and New Guinea, we should feel that this was a great and urgent Imperial service. You will, however, realise that any territory now occupied must be at the disposal of the Imperial Government for purposes of an ultimate settlement at conclusion of the war. Other Dominions are acting in similar way on the same understanding, in particular, suggestion is being made to New Zealand in regard to Samoa.
Arthur Jose writes in the Official History of the RAN in WWI that many Australians were puzzled to be told to use their navy not to defeat the enemy fleet, but to capture territory, ‘exactly the purpose against which all their previous advisers had warned them.’
The main threat came from the German East Asia Squadron of the armoured cruisers SMS Gneisenau and Scharnhorst and three light cruisers. The armoured cruisers were greatly inferior to HMAS Australia but superior to any other Australian warship. Their location was unknown.
An initial plan to seize German wireless stations expanded into one to take territory. This would deny the German cruisers possible bases. However, Jose suggests that this plan was devised in London, where some, expecting a short war, wanted to ‘have in hand some German territory for bargaining purposes, possibly to exchange for Belgium.’ On the other hand, Hew Strachan notes that ‘[b]oth Australia and New Zealand harboured their own imperialist ambitions’ and accuses Jose of ‘glossing over [the] sub-imperialist thrust’ of their actions.
The RAN covered the move of a New Zealand force to Samoa, which was taken without a fight on 30 August.
It then, accompanied by the French cruiser Montcalm, escorted the Australian Naval and Military Expeditionary Force, comprising 1,000 Australian infantry and 500 Australian and British naval reservists and commanded by Colonel William Holmes, to capture German colonies in New Guinea. Melbourne was despatched to destroy the German wireless station at Nauru.
The main force reached Rabaul on 11 September. Sydney put a 25 man naval landing party ashore at Herbertshöhe, now Kokopo, and Warrego and Yarra landed a similar force at Kabakaul They were ordered to find the wireless stations. Patey thought that there were two, one, inland from each landing point. In fact, both were at Bita Paka. The Herbertshöhe party was therefore unable to find its objective. The Kabakaul one was fired on as it advanced.
Two companies of naval reservists and two machine gun sections were landed from HMAS Berrima, an armed transport. They encountered a force of about 150 local police commanded by German officers and were reinforced by four companies of infantry from Berrima. Progress in the Battle of Bita Paka was slow, but the Germans retreated after the destroying the radio mast. The attackers removed the rest of the radio equipment.
Australian casualties were two officers and four men killed and an officer and three men wounded. Able Seaman W. G. V. Williams became the first Australian to be killed in action during the war.
The Official British Naval History says that ‘[f]or the Germans further resistance was now hopeless, but the Governor…[was] bent on making negotiations as dilatory as possible. On the morning of 14 September Encounter bombarded a German fortified position on a ridge. Australian troops advancing towards it in the afternoon were met by a flag of truce. The German governor surrendered German New Guinea on 15 September.
On 14 September AE1 disappeared on patrol off Rabaul with the loss of all 35 men on board, a mixture of RAN and RN personnel. She probably struck a reef or other submerged object and was the first RAN warship to be lost and the first British Empire submarine to be lost in the war. Her wreck has not been found but efforts to do so continue.
 Quoted in A. W. Jose, The Official History of Australia in the War of 1914-1918, vol. ix, the Royal Australian Navy, 1914-1918, Ninth ed. (Sydney: Angus and Robertson, 1941), p. 47.
 Ibid., p. 48.
 Ibid., p. 52.
 H. Strachan, The First World War: Vol. 1, to Arms (Oxford: Oxford University Press, 2001). p. 464 and footnote 44 on p. 465.
 J. S. Corbett, H. Newbolt, Naval Operations, 5 vols. (London: HMSO, 1938). vol. i, p. 285.