James McDonald enlisted in the U.S. Navy in October 1920, was discharged three years later and reenlisted in February 1926. Trained as a metalsmith, and later as a diver, he was commended in 1928 and 1930 for his excellent diving work. McDonald was designated a Master Diver in October 1934. From May to September 1939, he was heavily involved in rescue and salvage efforts on the USS Squalus. Four members of the salvage team were awarded the Medal of Honor for their actions during that operation. James McDonald, then a Chief Metalsmith, and three fellow divers (Chief Machinist's Mate William Badders, Chief Torpedoman John Mihalowski, and Chief Boatswain's Mate Orson L. Crandall) received their Medals of Honor from Secretary of the Navy Charles Edison during a ceremony held at the Navy Depart