The following is from “Don’t Tread On Me Flag History”:
In the fall of 1775, as the first ships of the Continental Navy readied in the Delaware River, Commodore Esek Hopkins issued a set of fleet signals. Among these signals was an instruction directing his vessels to fly a striped Jack and Ensign at their proper places. The custom of the jack-type flag had originated with the Royal Navy in the 15th century or earlier; such was the likely source of Hopkins’ inspiration. This first U.S. Navy Jack has traditionally been shown as consisting of 13 horizontal alternating red and white stripes with a superimposed rattlesnake and the motto “Don’t Tread on Me.” The rattlesnake had long been a symbol of resistance to British repressive acts in Colonial America; its display on the new jack of the fledging Continental Navy fit naturally with the fervor of the times.
In 1975, the Secretary of the Navy directed that the First Navy Jack be flown in 1975 and 1976 in lieu of the Union Jack during the United States Bicentennial Year as a colorful and historic reminder of the nation’s and the Navy’s origin.
On May 22, 2002, the U.S. Navy ordered all ships to display the First Navy Jack during the War on Terrorism.