Machinery Handbook 1941, page 1232
@Muh Muh - I got to the shop after the grandkids left. My working copy of the Machinery's Handbock is the 29th edition 2012. I also have an older version "someplace" - prolly in a cardboard box that hasn't been unpacked yet from when we moved to the farm.
Pg 1232 in my edition is about grinding wheel recommendations for hardened tool steel! LOL!
The section on Machine Screws doesn't start till pg1643.
I was not able to find the latest version of the info WhyDon'tYou posted. I thumbed through all the pages again and still couldn't find any mention of a #7 screw. Every chart in the book skips from 6 to 8 with no 7.
So much for new books!
I'm sticking to the conclusion reached with
@whydontu's help.
His chart lists the same thread pitches for a #7 as for a #8. A #7 screw would fit the #8 threaded holes to identify the pitch but a #8 would not fit the 5/32 hole. So the holes can be used to correctly identify both a #7 and a #8 screw.
I still wonder why the hole is labelled 5/32 instead of #7 though.