Why 1936 and 1937 Stepped Hub internals are your enemy
I tore apart the wheels for Doug's 39 yesterday and was surprised to find that both of the hubs were from a 35 to 37. The center sleeve is different, and the hub does not have the top hat spacer under large bearing cage. This is a terrible design and causes big problems. If you have this set up and ride your bike at all you may get hurt.
The sleeve wears into the back of the small bearing cage and the rollers do not have contact with the right spot on the sleeve. 38 and later hubs have a thrust washer between the cage and the sleeve to prevent this from happening.