According to the Nantucket Historical Association...
In the summer of 1937, Tony Sarg and several others promoted a hoax in Nantucket.
Sightings of a sea serpent were advertised... footprints were found... stories published...
Then, the serpent appeared on South Beach (now Washington Extension - not where it was intended to land!): it was one of Sarg's Macy's Day Parade balloons.
Tony Sarg (1880-1942) was an American puppeteer, illustrator, designer and painter. He is famous for creating balloons for the Macy department store parades and many illustrations for magazines. He owned a store in Nantucket, the Tony Sarg’s Curiosity Shop.
All of Nantucket must have visited. There are photos of this "sea-serpent" from many scrapbooks of the era.
link to the NHA's flickr set