The Dutch invented the Commodore rank about 1652 during one of their naval wars with England. They found they needed officers to command squadrons but did not want to create more Admirals, perhaps to avoid paying Admirals' salaries. A Commodore's pay was only about half that of an Admiral. The word comes from comendador, which means "having command over others" and might be of French or Spanish origin. The Dutch leader William of Orange introduced the rank to the British navy after he became King William III of England in 1689. Sometime later the British merchant marine began calling the senior officer of a merchant fleet Commodore. The Dutch also used the broad command pennant, a wide swallow-tailed pennant, that has become identified with Commodores in many navies, merchant fleets and yacht clubs.
Our Navy used Commodore as an honorary title from the Revolutionary War to the Civil War for Captains commanding two or more ships operating together or had other significant additional responsibilities.
In 1862 Commodore became an official rank and the Navy promoted 18 Captains. They wore the single star on their epaulettes. In 1866 they began wearing the two-inch stripe on their sleeve cuffs. The broad stripe was inspired by the Commodore's broad pennant and, in effect, transferred it from his ship's masthead to his sleeve, a practice also adopted by many other navies and yacht clubs.
Commodore was a command rank in our Navy from 1862 to 1899. After that it was a rank to which Captains who had served in the Civil War were retired. The rank was reestablished on 9 April 1943 for World War II service, and 147 officers held it as a temporary rank. After the war the flag rank structure reverted to its prewar form. By 1 January 1950, no commodores remained on active duty.
When the Defense Officer Personnel Management Act (DOPMA) became law in 1982, O-7 officers were designated commodore admirals. The Navy selected 38 Captains to wear the broad stripe and single star. In 1983 the Defense Authorization bill changed the title to commodore. With President Reagan's signature on the Fiscal year 1986 Defense Authorization bill, O-7 officer were again called rear admiral (lower half).