For some time the British and US government representatives have been negotiating for some sort of deal over the exchange of the base rights for the USA that have been ongoing for some years for military supplies. Prime Minister Churchill has been suggesting that some old US destroyers could be part of a deal, but this has attracted significant resistance from the navy who view them as old, obsolete and worn out. They would far prefer modern ships in exchange for the base rights.
At the beginning of July, a secret mission was undertaken by Cdr Wright, a Canadian engineering officer in the RN, and two civilian engineers. Masquerading as a USN officer (with the aid and connivance of the USA, in order not to reveal anything to the powerful isolationist lobby in the US), he spent 2 weeks examining a number of the destroyers held in reserve. His report was not promising.
Basically the destroyers were in poor condition, especially their machinery which was suffering from severe defects. His estimate was that it would take 4-8 months of dockyard work to put them into a condition suitable for deployment in a North Atlantic winter. As a result, the Admiralty made some suggestions, and these and the engineering report were discussed with Churchill.
On the 16th August the famous 'escorts for bases' deal between the USA and the UK was announced. This would exchange base rights for the USA in a number of strategic areas (which would significantly aid the USA's security) in exchange for 30 Corvettes and 30 of the new 'frigates' (currently in their final design stage), which would be built in US yards. The corvettes would take around 7-8 months to build, the frigates would commence in October (when the design would be complete and plans supplied to the US shipbuilders), and take an estimated 10 months to build.
Knowing he had to push this past the isolationist lobby, President Roosevelt announced thsi both as a measure to enhance US security in the face of a dangerous world situation (a phrasing that made it more difficult for the isolationists to object to), and that these ships would be used to defend the lives of the civilian victims of the U-boats.
While there would be a delay before the ships would be available, they would come into service not very long after the old destroyers would have done, and the Admiralty considered them much more useful as A/S escorts. While damage to destroyers had been heavy during the Dunkirk evacuation and also in the BoB so far, the number of ships sunk was far smaller, and the yards expected to have all but a few ships ready for action within a few months.
In the Mediterranean, the fleet bombards Italian positions at Bardia and Fort Capuzzo The ships had air cover provided from HMS Implacable, in addition to RAF Gladiators. 10 RA planes were shot down, three by the fleet air arm, and as a result of the disruption to the attackers no successful attacks were made on the fleet.
With the Empire's recent gains in Libya, the Royal Navy begins laying plans to send several of HMS Courageous's Swordfish aircraft to the Bardia area to operate against Italian supply lanes in the Gulf of Bomba.
On the 21st, the FAA demonstrates that it can hurt the Italian navy even when its carriers are not in the area. Having been informed of an Italian "depot ship" at An-el-Gazala, three Swordfish of HMS Courageous's 824 Squadron, FAA, temporarily based at Ma'aten Bagush, are transferred to Sidi Barrani, equipped with auxiliary fuel tanks and torpedoes. In the late-afternoon, the three headed out on the 180 mile flight to the Gulf of Bomba, routing 30 miles out to sea so as to approach the target from seaward.
Approaching the target, they sighted the Italian Submarine Iride (the mother ship for Italian human torpedoes arriving to attack Alexandria) approaching on the surface. Heading straight for her, the flight leader Captain Patch RM released his torpedo, which struck Iride amidships, sinking her.
Having had no opportunity to attack themselves, the other two continued on the mission assigned. As they approached, they discovered the depot ship Monte Gargano with a submarine and a destroyer tied up alongside. Both torpedoes ran true into the ships, the resulting explosions "sinking whole bloody lot". Initially treated with a certain amount of scepticism when they reported sinking four ships with three torpedoes, the crews were quite exuberant when recon photos the next morning verified that all three in harbour had, in fact, sank, though apparently the destroyer and the submarine were only beached.
