How did the US plan to use nuclear shells for naval guns?

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The main reason for them was simply giving the US Navy Surface Warfare community nuclear capability. Inter- and intra-service rivalry has been a very significant influence on the weapons and programs of the US armed services ever since the United States became economically powerful in the late nineteenth century.

So there probably never was a detailed plan for how to use them. Such plans aren't very useful for tactical-range naval weapons anyway, since unexpected situation show up a lot. They would have been effective for shore bombardment, which was the most likely use of big guns at the time.

The retirement date of the shells shows that they had no place in the SIOP nuclear war plan. They were retired in 1963, and the first SIOP was completed in late 1960 and implemented on July 1 1961. SIOP was updated annually thereafter, but none of the Iowa-class battleships were in commission at the time. SIOP was intended to be implemented rapidly and would not have allowed for the reactivation time for large ships, which is at least weeks.

Since the shells are too early to have been fitted with Permissive Action Links, any that were on board a battleship could have been used at the discretion of the ship's commander.

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