By late August 1915, Capelle had fallen ill, and so requested retirement from the navy, though he agreed to remain in the post until 1 November. In March 1916 Capelle was recalled to service and replaced Tirpitz, whose views on the naval war had become unpopular, as the State Secretary for the Navy. Capelle's position as state secretary was decidedly weaker than under Tirpitz's tenure; this was in large part due to the course of the war and the discrediting of the surface fleet policy advocated at first by Tirpitz and then by Capelle. Admiral
Paul Behncke, who would later serve as Capelle's deputy, stated that, "In the Navy, the position of the RMA has become purely administrative, it no longer plays a leading role." Though Capelle was initially opposed to unrestricted submarine warfare, a group of senior officers led by the commander of the
High Seas Fleet, Admiral
Reinhard Scheer, convinced Capelle to change his mind, who in turn worked to convince Wilhelm II to permit a return to unrestricted submarine warfare. By January 1917, Wilhelm II had consented, and Germany resumed the
U-boat campaign against Britain on 1 February. The US Congress voted to
declare war with Germany on 6 April 1917. Even though he agreed to resume the
U-boat campaign, Capelle did not believe that submarines had replaced the battleship as the decisive naval weapon, arguing in February 1917 that new battleship construction—that of the
L 20e α design—should not be stopped. In order to keep costs down, Capelle announced that the Navy would not build any ships over displacement or with a
draft in excess of ; these were the maximum dimensions of the existing harbours and dry docks. Larger designs would require prohibitively expensive dredging on harbours and channels and new docks. Nevertheless, by February 1918, design work on the new class of battleships had ground to a halt, and Capelle could do nothing about it; by this far into the war, the U-boat arm had absorbed all of the limited production capabilities of the Navy. Capelle also advocated for shipbuilding contracts with the
Ottoman Empire, Germany's wartime ally; he secured contracts for twelve
torpedo boats and twelve U-boats for the Ottoman Navy. Capelle also used the naval construction program to keep skilled workers out of the Army, in order to preserve their expertise for the Navy's needs. In August 1917, Capelle banned socialist literature from the fleet, in the aftermath of several disturbances. On 9 October 1917, in a speech to the
Reichstag, he accused the radical,
independent branch of the
Sozialdemokratische Partei Deutschlands (SPD–Social Democratic Party) of knowingly supporting these revolutionary actions, which drove moderate SPD members closer to the radical independent faction. This led to the toppling of
Chancellor Georg Michaelis, who was replaced by
Georg von Hertling. By August 1918, Scheer and a group of prominent commanders in the High Seas Fleet had convinced Wilhelm II that the senior officers in the naval high command needed to be replaced by more dynamic individuals. To this end, Wilhelm II requested the resignation of Capelle,
Henning von Holtzendorff, the Admiralty Chief, and
Georg Alexander von Müller, the head of the Naval Cabinet. Capelle resigned from the Navy in October 1918, shortly before the end of the war. His deputy, Paul Behnke, briefly replaced him but was also forced out due to his opposition to Scheer, who had by this time been promoted to the
Seekriegsleitung (Chief of Naval Staff). In 1919, Capelle testified before the
Reichstag War Failures Committee about his tenure as State Secretary during the war, particularly relating to the U-boat campaign against Britain. Capelle died in
Wiesbaden on 23 February 1931. ==Decorations and awards==