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The M5 Stuart light tank was a development from the prewar M3 Stuart, which in turn was an improved version of the 1935 vintage M2A1 light tank. The M2 was originally produced with light armor and twin machine gun turrets, but by 1940 the twin machine gun turrets were replaced by a single main turret holding a 37mm antitank gun, and this design was continued in the M3 which began production in March 1941. The M3 also had an additional half inch of armor and an improved Continental 7-cylinder air-cooled radial engine; the M5 further improved on this by an improved glacis slope and a replacement of the radial engine with paired Cadillac V-8 engines and a Hydra-Matic transmission.

These changes simplified logistics, since the Stuart no longer required aviation grade gasoline for its engines; and operations, since the new power train made it roomier, quieter, cooler, and easier to train on. Unfortunately, the 37mm gun was already obsolete for antitank work by 1942, but no attempt was made to add a larger gun to the Stuart.

The Stuart first saw combat in North Africa in its M3 version as part of the British 8th Army, where many Stuarts were shot to pieces by the Afrika Korps, ran out of gas due to limited fuel capacity, or experienced problems in combat due to the two-man turret. The surviving M3s were relegated to reconnaissance units or converted to APCs by removing the turret ("Stuart Kangaroos"). The other lend-lease recipient, the Soviet Union, found them even less useful since the avgas fuel requirement conflicted with the standard Soviet tank fuel requirement (diesel) and the high ground pressure of the Stuart led to it frequently becoming bogged down in the omnipresent Russian mud. The United States Army took another year to become convinced of the Stuart's uselessness as a main battle tank. It was not until after the debacle of Kasserine Pass in February 1943 that U.S. armored divisions were reorganized to eliminate the separate light tank battalion in each armored regiment and replace them with light tank companies within the new armored battalions, which would serve as reconnaissance elements.

In the Pacific, the Stuart fared better against inferior Japanese light tanks, and proved to be quite useful in jungle warfare since the Japanese infantry were neither trained nor equipped to fight tanks. Still, by late 1943, the U.S. Marines were replacing their Stuarts with M4 Shermans.

Towards the end of the war, the Stuarts would be replaced by the new M24 Chaffee, which had a much-desired 75mm main gun.

The M3/M5 Stuarts were named by the British after Confederate general J.E.B Stuart, who commanded the Army of Northern Virginia's cavalry corps under Robert E. Lee.

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