World War I
Callaghan's next posting was to the cruiser USS New Orleans (CL-22) in November 1916. Following the entry of the United States into World War I, in April 1917, the New Orleans escorted cargo ships crossing the Atlantic Ocean. It was at this time that he first met Ross McIntire, a surgeon, who would later have a significant impact on his career. According to biographer Francis Murphy, Callaghan played a pivotal role in the rescue of a disabled British liner off the coast of Ireland: "Four times a hawser was hauled aboard the cruiser from the liner, that was about three times the cruiser's size, and four times the cable parted. The Captain was for abandoning the job. But not Dan. With superhuman strength and the full cooperation of his men, he finally secured the cable. For forty-eight hours the New Orleans stayed with the stricken vessel hauling it out of danger finally handing it on to tugs from a North Ireland base."
Following the war, he settled in Georgetown, Washington, D.C. for two years with his wife and young son. During this time, he worked on reassignment of warrant and chief petty officers from the navy. Callaghan next served aboard the newly-commissioned battleship USS Idaho (BB-42), commencing in October 1920. While his family moved back to Oakland, he began serving as a fire control officer on the Idaho. He left the Idaho in June 1923, returning to shore duties for two years before taking up the position of First Lieutenant on the USS Colorado (BB-45) in May 1925. The Colorado transported a shipment of gold to Australia before returning to the United States in 1926. His next assignment was the position of gunnery officer, on board the USS Mississippi (BB-41). Captain Thomas Hart wrote of Callaghan: "I can scarcely report too favorably on this officer. He is excellent generally and particularly; and he looks and acts the part. As gunnery officer, he is being highly successful and I unhesitatingly recommend him for almost any detail."
Callaghan left the Mississippi in July 1928 and worked in naval inspections for the next two years. He served as Aide to the Commander in Chief, US Fleet, and was promoted to the rank of Commander in June 1931. He then served as Executive Officer of the Naval Reserve Officer Training Corps at the University of California, Berkeley, before working on the USS Portland (CA-33). In 1938, US President Franklin Roosevelt asked his physician, Ross McIntire, to recommend someone for the position of Naval Aide. McIntire recommended Callaghan, who was appointed to the role in July 1938 and would fill it for the next three years. He was promoted to the rank of Captain in October 1938.
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