I have to say that this is not something I was aware of until the Dunoon Observer recently published the Neil Munro story entitled,"Para Handy and the Navy"where Para Handy laments the passing of the Two Power Standard. The story was accompanied by an editorial column at the side which contained the explanation.
The 1899 Naval Defence Act stated that the Royal Navy should maintain a fleet of Battleships at least as large as the next two most powerful navies in the world, these being France and Russia at that time. This was known as the Two Power Standard.
The cost for such a five year plan is quoted as £21,500,000 which was a collosal sum in those days.
Given this Standard it is not hard to see why Brittania ruled the waves.