In 1923, the Treaty of London formally came into effect. Under its provisions, a wave of disarmament swept across the world, and Bulgaria was no exception—the navy's tonnage was slashed by sixty percent outright.
The entire navy was in turmoil. Even the retired Naval Marshal Petrov was alarmed, but there was nothing he could do.
The treaty had already been signed; the cuts had to be made. All the Admiralty could decide was which warships to retain and how many troops to disband.
The navy was unlike the army. An army could preserve its establishment so long as every man had a rifle, but without enough warships, personnel numbers were bound to be drastically reduced.
There was no avoiding cuts to the establishment, because in the 1923 defense budget, naval funding had already been cut by half, making it the lowest-funded branch among Bulgaria's army, navy, and air force.
That year's military expenditure was successfully kept to 23.7 percent of the fiscal budget, while the allocation ratio among the army, navy, and air force became 6:2:3.
There was no helping it—this was the Naval Holiday. Every country in the world was disarming, so Bulgaria naturally had to follow suit.
The proportion of fiscal revenue taken up by military spending fell sharply, but total military expenditure did not decline. As fiscal revenue increased, the share of expenditure occupied by military funding naturally dropped.
In 1918, Bulgaria's fiscal revenue had been 5.2 billion lev. But by 1923, the budget presented by the Ministry of Finance was 9.2 billion lev, an average annual fiscal growth rate of 12 percent.
There was nothing surprising about that. On one hand, Bulgaria's economy had developed rapidly in recent years. On the other, the government had sold off a large number of state-owned enterprises, shaking off burdens