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In September, 1940, Britain traded a number of its New World naval base sites for 50 "overaged' (old) destroyers in the so-called "Destroyer Deal." That doesn't seem like a large number of destroyers, except that it was "large" relative to the existing British destroyer fleet.
Why did Britain have so few destroyers, even after its World War I experience with submarine warfare that they needed to trade for old ones?
This source provides a complete list of the RN's vessels in service in September 1939. It lists 113 Modern Destroyers, 68 Old Destroyers, and 54 Corvette Escorts (including 4 Australian and 2 Indian), for a total of 181 destroyers and 54 Escorts. An additional 24 Modern Destroyers were under construction.
Additionally, the Royal Canadian Navy included 7 River-Class destroyers in 1939, and commissioned 1 additional River-Class and 8 Town-Class destroyers in September 1940 as pat of the WWII building program that would make it the Allies' third-largest navy, by number of vessels, in 1945. The Royal Australian Navy had the destroyers Stewart, Vampire, Vendetta, Voyageur and Waterhen in service in September 1939.
The most frequent RN organization of destroyers appears to be this:
Eight destroyers, each in the charge of a commander, plus a specially fitted leader commander (sic) by a captain, usually comprised a flotilla.
Additionally, between the wars the importance of airpower in deciding naval battles was increasingly recognized as of importance. Older destroyers without the capability of mounting A_A guns, and other modern armament, were often retired rather than moth-balled as not worth the expense of the latter. It was the surprisingly effective role of airpower in sinking the Bismarck that finally convinced the sceptics on both sides that the North Atlantic would be a battle of submarines against ASW vessels, rather than of surface fleet raiders eluding chasers.
Update comparison of Royal Navy between October 1918 and September 1939:
1918 1939 change
Battleships 34 15 -18 -54%
Cruisers 64 56 -8 -12%
Aircraft Carriers 0 7 +7 NA
B & C & AC combined 98 78 -20 -19%
Destroyers 233 181 -52 -21%
Escorts 0 54 +54 NA
D & E combined 233 235 +2 +1%
(ignoring specialty ships like minelayers, minesweepers, AA cruisers, etc.)
Contrary to the claim made in another answer, the large ships were disproportionally decommissioned in comparison to the smaller vessels.
Update #2:
Note also that the German submarines in World War 2 were fr the first 2 or 3 years much more effective than in World War 1, at least partially due to having broken the British and American maritime codes.
Update #3:
It was less about the number of destroyers available in 1939-40, as the much greater effectiveness of the Luftwaffe and Kriegsmarine in sinking them than was anticpated. In one letter to Roosevelt inquiring after the destroyers, Churchill noted that in the preceding ten days the Royal navy had had 11 destroyers sunk in the English Channel, and then precedes to list them.
Update #4:
The double whammy of losing the French Navy as an ally in the Mediterranean, and of the German U-boats being able to base in the Bay of Biscay and Brittany area, was completely unexpected. No pre-war planning in the Admiralty could have been expected to foresee such a rapid fall of France.
(The source is the Churchill's WW2 book).
Perhaps there's a clue in this snippet from the wikpedia Battle of the Atlantic page:
Despite their success, U-boats were still not recognized as the foremost threat to the North Atlantic convoys. With the exception of men like Dönitz, most naval officers on both sides regarded surface warships as the ultimate commerce destroyers.
A destroyer is almost no help whatsoever against a full-blown battleship, as its guns will not be able to penetrate the larger ship's armor. So if the naval officers making shipbuilding requests before the war thought that the bigger ships were more important, they would natrurally prioritize the building of those ships, to the detriment of small ships that cannot be effective against them.
It should also be noted that the British, while getting some use out of those 50 transferred destroyers, didn't really find them as useful as one might think. In fact, they were of the opinion that the US was getting much the better of the deal, and were mostly going along to try to keep the relationship between the two countries close.
Britain had no choice but to accept the deal, but it was so much more advantageous to America than Britain that Churchill's aide John Colville compared it to the USSR's relationship with Finland. The destroyers were in reserve from the massive US World War I shipbuilding program, and many of the vessels required extensive overhaul due to the fact that many were not preserved properly when inactivated; one British admiral called them the "worst destroyers I had ever seen", and only 30 were in service by May 1941.
As stated by Pieter Geerkens in his answer, the Royal Navy had 181 destroyers available to it in 1939 (including any that were in refit). I'm posting this in order to expand on the other answers.
In 1939 the Royal Navy maintained a large number of fleets and stations including (but not limited to):
- Home Fleet (Admiral Sir Charles Forbes)
- Mediterranean Fleet (Admiral Sir Andrew Cunningham)
- Cape of Good Hope Station [Covered the South Atlantic] (Vice Admiral Sir George Lyon)
- North America and West Indies Station (Vice Admiral Sir Sidney Meyrick)
- East Indies Station (Admiral Sir Ralph Leatham)
- China Station (Admiral Sir Percy Noble)
- New Zealand Station [Pre-cursor to the Royal New Zealand Navy] (Commodore Henry Horan)
The Royal Navy was faced with a need to maintain, and in some cases increase, deployments to these stations.
The Mediterranean Fleet had to fight/guard against the German and Italian navies.
The Home Fleet had to protect the UK itself and associated shipping.
The East Indies Station and China Station (alongside the Royal Australian Navy) had to guard against increased Japanese aggression.
Granted, not all of these formations contained destroyers but the extent of the deployments maintained by the Royal Navy is important in this case.
I wouldn't say the Royal navy has 'so few' they had a very large number, it just turned out they could have done with quite a lot more. The main reason they felt themselves so short of destroyers is they underestimated the submarine/u boat threat and the need for convoy escorts.
There was limited Royal Navy investigation of submarine and anti-submarine warfare in the interwar period, they really should have developed some of the anti submarine weapons and methods during the interwar period. The dismissing of the the need to convoy merchant vessels was fairly blind in the light of WW1 experience
Destroyers and Transports are those unexciting little necessities that Peacetime admirals cut back on in favor of big shiny Battleships or Aircraft carriers. No dignitary gets excited about breaking a beer bottle over a destroyer's bow.
When serious fighting breaks out, suddenly you need these vital support vessels and you feel the pinch until your industry kicks in.
