It was founded in 1733 in Portsmouth Dockyard, with the intent of training about 40 boys "sons of the Nobility and Gentry" in the arts of seamanship before being sent to sea, but became the Royal Naval Academy in 1773 after a visit by King George. I am uncertain whether a fee was demanded, but there was no competition, as the 40 places were evidently rarely filled.
It does not seem to have been over-popular, and most boys did go straight to sea; historian Michael Lewis wrote "...many of the senior officers, not having had the advange themselves of much theoretical schooling, tended (being human like other people) to ask 'Whats the use of book-learning to sea-officers?'" St. Vincent dismissed the Naval Academy as "a sink of vice and abomination". What exactly he meant is uncertain, but James Trevenen (a naval officer who left us his memoirs) was an 'Academite' and stated that there were some "confirmed drunkards, some practiced blasphemy and some both" (...binge drinking teenagers are not new then!).
There were some who attended the Academy who went on to have a distinguished career; Philip Vere Broke (of the Shannon) and Thomas Byam Martin (a frigate captain and later Admiral of the Fleet) were both former pupils.
During the early years of the 19th century, it seems to have perked up, probably as the demand for officer candidates increased with the long French war; it was enlarged in 1806 and numbers allowed in expanded to cope with the demand - doubling to 80. It changed its name at the same time to become the Naval College.
Lewis also analysed the backgrounds of over 3,000 officers who featured in O'Byne's Naval Biography (1849); he found that just under 3 percent had either been to the Academy or its replacement, the Royal Naval College (1806).
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