Co-Prosperity Sphere:
The USN’s Lost Warships of 1937

By Mike Bennighof, Ph.D.
March 2020

By 1937, the Great Depression seemed to be easing in the United States. Unemployment dropped from 16.9 percent for 1936 to 14.3 percent for 1937. And then things began to go wrong, with unemployment jumping back up to 19 percent for 1938. Then as now, of course, the official unemployment numbers masked the true extent of the pain, not counting many out of work, or making no adjustment for those working part-time, or those in jobs making far less than they had previously. The Great Depression did not end in 1937, as some hoped it might, and instead continued until the United States entered the Second World War. What some economists call a “double dip recession” had come to pass.

While the basic facts about 1937 are fairly clear, three-quarters of a century later the debate over their root causes is as bitter as only a fight at the junction of academia and politics can be. Depending on the political hobbyhorse being ridden, the recession was the result of a drop in government spending, a tightening of the money supply, the impact of New Deal regulations, union activity, or the arrival of gold in the suitcases of European refugees.

Not just a statistic. An Oklahoma migrant mother in a California camp, 1937.

Some of these explanations are patently ridiculous (suitcases full of gold?), some are exaggerated (those “new regulations” include such radical steps as the 40-hour work week) and others obviously represent strident political opinions of the present projected onto the past. What can’t be argued is that spending did, in fact, drop as President Franklin Roosevelt swung toward the notion of balancing the federal budget. Defense spending dropped for 1937, from $2.7 billion to $2.2 billion (this was still more than the $1.9 billion for 1935 or $1.1 billion for 1934). It would drop again in 1938 to $1.7 billion. And by cutting spending shortly before a war he and many others believed inevitable, Roosevelt satisfied the deficit hawks at the price of long-lead-time items like heavy warships that could not be constructed quickly
Had Roosevelt maintained the equivalent of stimulus spending, a number of warships probably would have been laid down in 1937 and 1938 rather than 1939 through 1941. Roosevelt presented the aircraft carriers Enterprise and Yorktown to Congress in 1934 as much as job-creation projects as military assets; the cutback in federal spending in 1937 not only deprived shipyard workers of their jobs, it also meant that the Two Ocean Navy would have to wait a few more crucial years.

Tracing the missing warships of 1937 requires a fair amount of conjecture, since most of them were not even projected or requested. The administration never let them proceed to that stage. But given the later patterns of American military spending, it’s fairly easy to fill in the construction gaps.

Most obvious would have been a third and fourth battleship of the North Carolina class. North Carolina and Washington came with price tags of $77 million apiece, so that extra $500 million for defense would have covered an additional pair. American practice had been to order two battleships in each fiscal year during the build-up prior to the First World War, accelerating to classes of four as the arms race heated up during and after the Great War. Once the full build-up for the Second World War began, the United States returned to four-ship groups with the Iowa class (the South Dakota class initially had only two members, with two more added in a supplemental spending bill; the Iowa class would eventually number six ships, but began with four and added two extras as part of the 1940 emergency expansion program).

Roosevelt already faced heavy political pressure to build at least one of the two battleships at New York Shipbuilding in Camden, New Jersey. But price differences caused the Navy to place the contract across the Delaware River at Philadelphia Navy Yard. The two contracts were let in June 1937 despite a great deal of labor unrest as unions sought enforcement of new minimum wage, worker safety and 40-hour week rules.

If laid down at the same time as North Carolina and Washington, the two additional ships would also have completed during the spring of 1941, but would have suffered the same vibration problems as their sisters and not have been at Pearl Harbor, either. Joining the fleet in early 1942, they could have been available for the Battle of Midway or even Coral Sea, greatly changing the outlook of the American leadership in either engagement.

A second pair of Enterprise-class aircraft carriers would also likely have been part of the program. Roosevelt considered aircraft carriers a far better economic and political investment than battleships, as the associated need for new aircraft spread jobs and spending to inland states as well as the ship-building areas. The president, with a strong background in naval politics, had even urged that a hybrid battleship-carrier proposal be strongly considered when North Carolina was still in the design stage.

The next carrier built after the Yorktown class, Wasp, was an unsatisfactory ship thanks to design compromises made to fulfill naval armaments treaty limitations, but these would no longer apply to the 1937 ships. When financial clouds lifted and a new carrier was ordered in 1938, Hornet would be a repeat Yorktown, and so would have been new ships ordered in 1937. The pair of carriers ordered in 1934 had cost $40 million for both without their air groups, so a new pair would have easily fit within the expanded defense budget.

If laid down the following spring, the carriers would have completed in the spring or summer of 1940, giving enough time for them to have worked up their air groups by the outbreak of war. Two additional carriers available at the time of Pearl Harbor might well have been caught with the battleship fleet and destroyed there. Had they escaped like their sisters, the United States would have been able to match the six big carriers of Japan’s First Air Fleet – greatly changing the strategic considerations that led to the battles of the Coral Sea and Midway.

The United States had filled its quota of 18 heavy cruisers by laying down Vincennes in 1934 and Wichita in 1935; any new cruiser construction would have to conform to the London Naval Treaty’s limit of 8,000 tons’ displacement and 6-inch main guns. No limits had been placed on the number of cruisers that could be built to these specifications, and the United States planned to build a lot of them at some point: the British intended to keep 70 cruisers in service, while the Japanese already had as many cruisers at sea as the Americans. Congress had authorized up to 35 more cruisers in a 1934 act; all that remained were to settle on a design and obtain funding.

Had Roosevelt continued his stimulus spending through 1937, the funding would have been there. The design would have been a different question, as Navy leaders argued furiously over the direction new cruiser construction should take. Some fought for a destroyer leader, others an anti-aircraft cruiser and still others a general-purpose cruiser of limited abilities given the lowered displacement. Most of the admirals seem to have been looking to a proposed six-inch dual-purpose rapid-fire gun to solve their dilemma: a ship armed with eight of these in twin mounts could fulfill almost all of the required missions.

But with little hope that the new weapon’s development would be complete anytime soon, two alternatives gained traction: a ship armed solely with five-inch dual purpose guns and a more traditional cruiser type with nine six-inch guns. The anti-aircraft cruiser eventually became the Atlanta class, while the design armed with six-inch guns would be abandoned (the Cleveland class eventually ordered for the same requirements was a modified version of the much larger Brooklyn class design).

Another issue prolonged the cruiser debate: the radical new features of the North Carolina class battleships had tied up the Navy’s skilled nautical engineers. Only preliminary sketches could be made for new cruisers until the drafting teams had finished with the battleship plans. Since existing cruiser designs (Brooklyn and Wichita) exceeded treaty limitations, the option of simply repeating a proven ship class as with the carriers did not exist for new cruiser construction.

Even so, the lack of these four major warships would be keenly felt in the early days of World War II. Tanks and planes could be built far more quickly, as could even destroyers and submarines. And building aircraft or vehicles in the mid-1930’s might not have greatly enhanced American military power; Italy, for example, went to war in 1940 with the best equipment of the previous decade and suffered terribly for its obsolescence. But heavy warships take years to build, and the rapid American mobilization commencing in 1940 could not make up for the years lost mollifying the opposition’s bean counters.

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Mike Bennighof is president of Avalanche Press and holds a doctorate in history from Emory University. A Fulbright Scholar and award-winning journalist, he has published over 100 books, games and articles on historical subjects. He lives in Birmingham, Alabama with his wife, three children and his dog, Leopold.