Suddenly another major warship was observed, further east, and for a short while the crew on board the Rawalpindi hoped it was a British cruiser. In fact, it was the Gneisenau and she was soon identified as a German battleship. Kennedy fully realized that his ship was doomed. While Scharnhorst’s signal lamp sent yet another message, Kennedy turned towards his officers on the bridge.

‘We’ll fight them both, they’ll sink us – and that will be that. Goodbye.’ He shook the Chief’s hand, turned on his heel and cleared the decks for action. Kennedy had been moulded by the traditions of the Royal Navy and surrender was unthinkable to him. The auxiliary cruiser was made ready for battle.

On the Scharnhorst’s foretop, Captain Hoffmann watched incredulously how the Rawalpindi turned to starboard. ‘What is she doing?’ he exclaimed in astonishment. ‘She can’t intend to attack us?’ But as the Rawalpindi completed her turn and approached on a south-southeasterly course, it indeed seemed as if the auxiliary cruiser was attacking. Three times Hoffman requested the Rawalpindi to stop and take her crew into safety, but the auxiliary cruiser showed no inclination to comply with the requests. The range was quickly reduced and soon amounted to little more than 5,000 metres. Finally, Hoffmann decided to sink the wilful ship, but the Rawalpindi opened fire first. Her port 15cm guns fired a salvo against the Gneisenau, which hit but failed to cause any damage. Shortly afterwards, the British ship fired a starboard salvo at the Scharnhorst and again scored, but without causing any damage. The protection of the German ships seemed too strong.

Nevertheless, the Rawalpindi’s fire was not harmless and the Germans soon responded. The first shell from the Scharnhorst hit the boat deck just beneath the bridge. The radio room was destroyed and splinters from the explosion penetrated the floor of the bridge, killing most of the men there. It was the beginning of a quick execution of the poor Rawalpindi, as the Germans could hardly miss at the short range. The fire control was knocked out, thereafter one of the starboard guns. The electrical power to the ammunition lifts was put out of action. Kennedy, who had survived the massacre on the bridge, ordered the seven remaining guns to fire individually and ammunition to be carried to the guns.

The Rawalpindi suffered further hits. Her steering system was destroyed. Fires covered her from fore to aft and her guns were silenced one after the other. Somebody yelled that the captain was dead and the struggle against the German battleships gradually became a struggle to survive. A life boat turned upside down when it was lowered down to the sea. On the deck a number of shells had began rolling away from a knocked-out gun and a few seamen threw them overboard, to prevent them from reaching the flames and exploding. One of the loaders bellowed at his comrades to help him—he was so confused and shocked that he could not understand that the men he shouted at were already dead.

The inevitable end came as a shell from the Scharnhorst hit one of Rawalpindi’s magazines. The ensuing explosion tore the hapless auxiliary cruiser apart and she sank quickly. A few life boats had already been launched and some of the crew had saved themselves. The men who remained on board the Rawalpindi dived into the ice-cold water. Unfortunately the Scharnhorst had come so close that her backwash turned some of the life boats upside down. The Germans stayed to help save British seamen, and this rescue work was in full swing when suddenly an unknown ship was sighted. The initial report from the Rawalpindi had reached Home Fleet and the light cruisers Newcastle and Delhi had been dispatched, together with their heavier sisters Suffolk and Norfolk. The Newcastle was the first to arrive on the scene. The Germans broke off the rescue when they saw the British warship and turned away in the twilight. The British cruiser vainly tried to follow them, but she could not match their speed. She had to turn back and save the survivors of the Rawalpindi. Only 38 men from her complement of 276 survived.⁶

Admiral Marschall seemed to believe that the British would be able to order warships to the area far more swiftly than was actually the case and consequently he ordered his squadron back to German bases. Soon visibility deteriorated, thus facilitating his attempt to return undetected. The barometer fell and a gale began to blow. The Scharnhorst and Gneisenau scarcely reduced their but proceeded at 27 knots in the violent weather. On 27 November they reached Wilhelmshaven.⁷

After these fumbling efforts to initiate cruiser warfare in the Atlantic, the strategic situation changed to such an extent that further German attempts to reach the Atlantic were temporarily abandoned. Scandinavia suddenly attracted Hitler’s attention. Several factors were behind his newly awakened interest in northern Europe. The commander-in-chief of the German Navy, Admiral Raeder, advocated an invasion of Norway, arguing that the German Navy might find far better bases along the Norwegian coast. Such bases could not easily be blockaded by the Royal Navy and could be used for submarines as well as surface vessels. There were also strong fears that the Royal Navy might block shipments of Swedish iron ore, which was shipped from the port at Narvik to Germany. The iron ore was crucial to Germany’s ongoing war efforts. At first Hitler was indifferent to the warnings, but after he had met the leader of the Norwegian fascist party, Vidkun Quisling, and seen reports that the allies planned to attack Scandinavia, he decided to occupy Norway and Denmark. The preparations for this operation, code named Weserübung, called for a halt to the cruiser warfare in the Atlantic.

When Germany attacked Norway and Denmark on April 9, most of her Navy was involved. Several of the assumptions upon which the Germans had based their plans quickly proved wrong. Among other things, Norwegian resistance was tougher than expected. The hopes that tankers would reach Norwegian ports undetected turned out to be unfounded. The German Navy suffered serious losses: one heavy cruiser, two light cruisers and ten destroyers. Further, two battleships, one heavy cruiser, one light cruiser and one pocket battleship were damaged and required several months in shipyards before again being capable of operations. During the summer of 1940, only the heavy cruiser Admiral Hipper was available for operations in the Atlantic. The recently conquered bases were of little value when hardly any ships were available.

Plans for cruiser warfare had to be postponed further during the summer of 1940. The German Navy was expected to take active part in Operation Sealion, the planned invasion of Great Britain. The Kriegsmarine had to keep its few heavy units ready if the operation were initiated. Not until 17 September, when Hitler shelved Operation Sealion, could Raeder and his colleagues seriously begin to reconsider forays into the Atlantic.

The Royal Navy had also been prepared for Operation Sealion. A significant portion of her destroyers and escort ships were tied up in the Channel ports, in case of a German invasion. The German submarines were able to attack weakly protected British convoys, while many of the escort ships were awaiting a German invasion of Britain. Although the British could not know what Hitler had decided, from mid-September they grew increasingly confident that there would be no German invasion during 1940, not least because of the difficult weather that could be expected during the autumn. As the Germans lacked real landing craft, they had to rely on prams and various other vessels of limited seaworthiness, so calm weather was a prerequisite for invasion. Furthermore, their inferiority at sea forced the Germans to rely on air support from the Luftwaffe, which also required good weather in order to operate effectively.

From mid-September onwards, there were likely to be long periods when the weather would not be appropriate for an invasion. When the Battle of Britain failed to weaken the RAF significantly, so that it remained a force to be reckoned with, it was clear that the imminent danger of invasion was over. The Royal Navy was able to send many of its ships to escort the convoys on the Atlantic. Consequently, losses of merchant ships declined during the latter part of 1940. Thus Raeder had good reason to use his surface ships to increase the pressure on the shipping lanes in the Atlantic. In short, he wanted to use the German Navy in what he regarded as its primary role, that of attacking British imports over the sea.

Both sides began to devote a larger share of their resources to the war in the Atlantic, but a few factors favoured Germany, making her prospects look brighter compared to the situation one year earlier. France had been knocked out of the war, while Italy had entered it, which meant that the situation in the Mediterranean had changed dramatically. The Royal Navy had to send many ships to Alexandria and Gibraltar to counter Mussolini’s ambitions. The Home Fleet was further strained by the fact that larger areas had to be patrolled after the German conquest of Norway.

The time had come to begin operations against the British sea trade.