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The US Navy held a trial in 1894 to adopt a new rifle, one to finally replace the .45-70 black powder Trapdoor Springfield. The rifle was to be chambered for the .236 Navy cartridge, a radically modern small bore round firing a 135 grain bullet at a remarkably fast 2500 fps. This was a lightweight cartridge which allowed sailors and Marines to carry more ammunition (standard load out was 180 rounds per man), and its high velocity provided a very flat trajectory and very good penetration.

For this round, James Paris Lee developed and patented an unusual straight-pull action. It was a tilting bolt type of system, with a bolt handle that calmed the bolt upward to unlock it (instead of the rotating bolt heads usually found on straight-pull rifles). He also developed an en bloc clip for loading in which the clip allowed 5 rounds to be loaded at once, but was not essential to the cycling of the action. Lee’s clip fell out as soon as the first round was chambered, and the rifle could be loaded with loose rounds, unlike Mannlicher’s clip system.

The Lee rifle ultimately won the trials, and a total of 15,000 were ordered in two batches by the US Navy (plus a few more supplied to replace guns destroyed in a New York dock fire). The rifle would only serve as standard for about 6 years, being replaced by the 1903 Springfield in order to unify Army and Navy ammunition logistics. During that time, however, it saw use in the Spanish-American War, in the Philippines, and in the international expedition to China. It was successful and well liked by the sailors and Marines who used it, despite a few design problems (like the extractor being easily lost when the bolt is removed). The gun was a commercial failure for Winchester, with a few thousand sales until 1902, when a large supply of cheap surplus captured Spanish Mausers dropped the bottom out of the modern small-bore rifle market in the United States. The last commercial sale was recorded in 1916.

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