In August 1939, the Admiralty requisitioned the Rawalpindi as an armed merchant cruiser, equipping her with 4 x 6-inch guns. With a crew consisting primarily of naval reservists under the command of Captain E. C. Kennedy, she was assigned to the Northern Patrol between Iceland and the Faroe Islands, there to intercept German merchant shipping and escort convoys. In the late afternoon of 23 November, her crew sighted what Kennedy identified as a pocket battleship of the Deutschland-class, but in fact, it was the Scharnhorst, with a main battery of 9 x 11-inch guns. The sighting was reported to the headquarters of the Home Fleet. The Rawalpindi was then ordered by the Germans to heave to and maintain radio silence, but Kennedy responded by turning toward the German ships and laying a smoke screen. After the Rawalpindi ignored a warning shot across the bow, the Scharnhorst opened fire with her large guns at about 8,250 yards and was soon joined by the Gneisenau. Kennedy returned fire and scored one ineffective hit on Scharnhorst, but the rest of his shots fell short by hundreds of yards. After 10 minutes, the Germans disengaged on receiving false reports of torpedo tracks, but the Rawalpindi was left burning fiercely. The ship remained afloat another three hours, during which time the Germans searched for survivors. Kennedy and 270 others were lost; of 38 survivors, 27 were rescued by the Germans, and the remainder were saved by the British cruiser Newcastle.
The Rawalpindi's arrival on the scene reinforced the decision of the German task force commander, Vice Admiral Wilhelm Marschall, to abandon his mission on grounds of poor visibility and British knowledge of his presence. He was criticized for that decision on his return to Germany. John A. Hutcheson Jr.
Barnett, Correlli. Engage the Enemy More Closely: The Royal Navy in the Second World War. New York: W. W. Norton, 1991.; Kludas, Arnold. Great Passenger Ships of the World. Vol. 3, 1924–1935. Wellingborough, UK: Patrick Stephens, 1976.
John A. Hutcheson Jr.