Autumn of 1937 saw the continued focus on the Spanish Civil War as desired by the Imperial Chancellor. Since the end of the Great War, any Italian government had hoped to place Austria under its protection, at least as a buffer zone between Italy and Germany. Even though Mussolini's initial attitude toward the Austrian issue was indifferent and tough when the Nazis came to power, Hitler's four-year effort in establishing a powerful nation different from the past made Italians take notice:
In Munich, Mussolini reviewed a large-scale parade of SS troops marching in precision alongside Hitler. In Mecklenburg, visitors witnessed exercises of the German Army's offensive capabilities. In Essen, the group toured Krupp's large factories. In Berlin, millions of people—many brought by special trains from neighboring provinces—lined the streets to welcome the Italian delegation, with 60,000 SS deployed to maintain order among the enthusiastic crowd. Such diplomatic activities were unprecedented in German history.
The Axis between Germany and Italy was solidified, and Japan was soon to join. However, Zhang Haizhao found himself with more concern than influence. Leaving aside that his influence was insufficient to change Adolf Hitler's foreign policy, looking globally, only those two fascist countries, for various reasons, were likely to join this dangerous alliance. Zhang never hoped that the Americans, with their serious isolationist tendencies, would join any side before the war, especially when Germany's actions clearly didn't align with their interests.
Upon returning to Germany from Spain, the "Deutschland" quickly underwent repairs and modifications. While the "Admiral Scheer" and "Admiral Graf Spee" didn't return from Spain until the end of the year, the "Deutschland" spent the entire summer and fall as the flagship of the German fleet in a relatively lonely atmosphere. Besides routine patrols, it was frequently used by experts from the Navy's Technical Department for various tests—a development that pleased Zhang. In order to further enhance the anti-aircraft firepower of the Deutschland-class battleships, the original 88mm single-mount anti-aircraft guns were replaced with twin 4.1-inch (105mm) mounts, requiring modifications to the ship's decks. Although this made the deck space more crowded, it significantly increased medium-to-long-range anti-aircraft firepower.
Moreover, stimulated by news that the British were secretly developing shipborne and airborne radar, Hitler personally ordered the Navy Ministry to accelerate radar technology development—a departure from historical events. Zhang had to admit that he used some personal connections in this matter. This important information was reported to the Führer by "Hans Lomester," reportedly a senior spy of the national secret police operating abroad. Apart from Zhang and Edvin, no one knew that this was a fabrication. However, the Führer believed it wholeheartedly. Despite his lack of understanding of naval tactics, Hitler couldn't allow potential adversaries to gain an advantage in crucial technology. Therefore, he specifically instructed the Defense Ministry to allocate an additional budget of 1.2 million marks to the Gema company.
At the beginning of Hitler's regime, Germany's intelligence work was not fully unified. The High Command had its own intelligence agency, subdivided into Army and Navy intelligence bureaus. Spies weren't like magic beans turning into soldiers on enemy soil. They needed identification, training, equipment, tasks, disguises, insertion, contact, payment, sometimes extraction. Their reports had to be analyzed and forwarded, and their files kept. All of these were reasons for the existence of a complex intelligence organization and its functions.
Nowadays, the High Command's intelligence bureau still collected military intelligence from various countries, while domestic intelligence affairs in Germany were handled by the national secret police and the SS Security Service—thanks to Edvin, the Gestapo didn't turn them into a fearsome organization, but their nature in upholding Nazi rule hadn't changed. Under Hitler's instructions, they also engaged in suppressing competitors and Jews, though to a lesser extent than history, still scorned by the vast majority of upright people. This was particularly evident in the navy, where senior naval officers led by Raeder refused to dismiss experienced and capable officers of Jewish descent and tried to protect them as much as possible within their power.
Given these factors, Zhang deliberately reduced his public contacts with the Chancellor's Office and the senior leadership of the NSDAP—he didn't want to be "despised" throughout the navy. However, when necessary, he still secretly helped navy personnel who were under scrutiny through his relationship with Edvin. But the Nazis were always eager for power struggles, and with someone like Himmler, who had long coveted the throne of the SS leader, Edvin's help was often limited and couldn't blatantly defy the directives of the Nazi leaders and the Führer. Privately, they referred to such behavior as "operating in the deepest underground."
By the winter of 1937, the situation in the Spanish Civil War had become clear. The Republican government had lost the northern industrial zone and showed increasingly weakened combat effectiveness in several battles. With the assistance of substantial military supplies and air support from Germany and Italy, Franco's Nationalists gained the upper hand in the air, on land, and even at sea. After receiving ships and submarines provided by Italy, the Nationalist Navy turned the tide of the early stages of the civil war. They not only effectively protected their maritime supply lines but also cut off overseas aid to the government forces by capturing major coastal ports.
This situation allowed the German Führer to confidently recall his beloved Deutschland class battleships to Germany. In Wilhelmshaven and Kiel, the "Admiral Scheer" and "Admiral Graf Spee" underwent the same modifications as the "Deutschland." That winter, all three pocket battleships were equipped with Gema's latest research findings—Seetakt-G type radar. In the long run, this move was crucial for the three super-light battleships, which primarily focused on surface warfare.
"Surface combat exercises?"
Old Raeder was evidently very interested in these words. Given the assumption of a renewed war between England and Germany, the General Staff had conducted internal simulations more than once, concluding that a combination of surface attacks and submarine harassment was the best way to strangle the British Isles' sea lanes. Whether naval aviation could play a role depended on the Luftwaffe's ability to suppress the Royal Air Force, a matter that naval officers and staff officers were uncertain about, so naval aviation was mostly considered for reconnaissance and coastal bombing.
Zhang explained, "In about two weeks, the ocean-going fleet under the Schneider Shipyard's flag will set sail from Brazil. Twelve freighters loaded with various industrial raw materials and agricultural products will form a medium-sized fleet, with crews consisting of our people. Therefore, I think the General Staff can organize an actual surface combat exercise using this opportunity to strengthen the coordination between officers and sailors, combat vessels and auxiliary ships! Conducting simulations only on paper makes it difficult to identify some actual problems that exist within the fleet!"
Old Raeder didn't rush to respond but had his orderly summon the current Chief of the General Staff, Jodl, and the commander of the main fleet, Wilhelm Marschall, and had Zhang verbally repeat the plan.
"Good, I've been looking forward to such exercises! Right now, all three Deutschland-class ships are on standby in the harbor, and four auxiliary ships are ready for use at any time!" General Jodl grinned at Zhang, looking like a rough old sailor—his voice was always so loud that officers jokingly said he wasn't suitable for submarine duty because his voice could be heard "10 miles away" on a calm sea.
In the 12th century, there was a valiant knight under the English king named William Marshal, and the German Navy's William Marschall shared the same qualities. He also supported Zhang's proposal and thought further: "Indeed, such exercises are very beneficial for enhancing fleet combat effectiveness! Even if the exercise doesn't reveal the exact location of the fleet, I believe the new radar installed on the ships is capable of expanding the search area to several times what it was before. With three Deutschland-class ships forming a broad line abreast and the cooperation of seaplanes, no fleet can escape from our sight!"
"Ah, we can even invite the Führer to act as the chief judge of this exercise, let him see the strength of our navy!" General Jodl exclaimed excitedly.
"The Führer?" Raeder and Zhang looked at each other involuntarily, both with the same concern in their eyes: once the Führer got involved, could the secrecy of this exercise still be ensured? Goebbels, that big loudspeaker, probably wouldn't miss any opportunity to enhance the prestige of the Führer.
"What?" General Günther Jeschonnek, momentarily caught off guard, looked around at the others, but nobody made a move or spoke — not even a slight nod, which might be misinterpreted by those with ulterior motives as disrespect to the Führer. This was one of the reasons why higher-ranking officers needed to be more cautious compared to junior officers and enlisted personnel.
After pondering for a while, Admiral Erich Raeder spoke up, "Here's what we'll do: I'll personally report the outline of this exercise to the Führer and invite him to speak to the troops and present awards at the end of the exercise in Kiel Harbor. What do you all think?"
Generals Jeschonnek and Wilhelm Marschall exchanged looks, but nobody had a better suggestion. Zhang Hainuo felt the same way. However, in his heart, he felt an added admiration for Raeder's adept handling of the situation.
With that decision made, Zhang Hainuo eagerly carried the news back to Kiel Harbor. There, the entire main fleet — including five light cruisers and auxiliary vessels suitable for long-range sailing — quickly received orders to prepare for combat deployment. The German Naval Staff proved to be the most efficient organization in the navy, producing a detailed and reasonable exercise plan within four days. After deliberation and refinement, the exercise plan was finalized and named "The Lookout."
On New Year's Day 1938, amid a chorus of celebration, the new British Prime Minister, Neville Chamberlain, believed that only through appeasement policies could Europe achieve lasting peace. His Foreign Secretary held similar views. However, across the Channel, their old neighbor was secretly preparing a naval exercise depicted as "slitting the enemy's throat." Seventy percent of the elite German Navy, including the three most advanced ships of the Deutschland class, participated — only torpedo boats were excluded. The three U-boats that were undergoing long-range training in the Atlantic were subsequently included in the exercise.
On January 15th, "The Lookout" exercise officially began. To conceal their intentions, the "Deutschland" and two sister ships left the port under the guise of routine patrols. Although they claimed to be heading for the Baltic Sea, they soon diverted through the Skagerrak and Norwegian Sea into the North Atlantic. Due to the harsh weather conditions, European countries remained unaware of the German Navy's actions — a tactic long advocated by the German Naval Staff.
On the cold sea, with snowflakes swirling in the wind and biting waves crashing against the decks, the steel behemoth of the "Deutschland" seemed to bob like a dinghy. Despite the adverse conditions, an optimistic and upbeat atmosphere pervaded the command tower. Every crew member, regardless of rank or duty, devoted their full attention to their tasks. They knew that they would repeat this route under fire in less than two years.
"Radar room report! Echo detected at 32 degrees to port, one target, distance 16 kilometers!" Zhang Hainuo conveyed this report to Captain Loen, indicating that the Seetakt-G radar on board was functioning normally even in such harsh weather conditions. This was one of the objectives of their exercise — surface group navigation.
Following his usual habits, Loen briefly observed the direction through binoculars. With the sea raging and visibility limited to 5-6 kilometers due to the day's conditions, having electronic eyes was crucial. Throughout World War II, the German Navy suffered numerous setbacks due to poor visibility.
"Maintain course, turn left 15 degrees! Keep a close watch on the target!" After Loen issued this command, it took about an hour for the signal lights of the "Admiral Scheer" to appear on the horizon. As the two sister ships sailed side by side, it felt as though the crew were looking at themselves through a strange mirror.
Meanwhile, the "Admiral Graf Spee," which had departed earlier, had already reached the depths of the Atlantic to the west of Ireland. According to the "Lookout" exercise plan, the attacking side only knew the route of the convoy — from Rio de Janeiro to Plymouth — and its composition: five ten-thousand-ton ships and seven ships with a displacement between 3000 and 9000 tons, escorted by two light cruisers.
Under the cover of snowstorms and darkness, the "Deutschland" and "Admiral Scheer" successfully traversed the frigid waters off the north of Scotland, their radars functioning flawlessly, thus easily avoiding what appeared to be a British destroyer. Two days later, the two ships rendezvoused with the "Admiral Graf Spee" 300 nautical miles southwest of Ireland. The "Three Musketeers" of the German Navy advanced side by side, 80 nautical miles apart, and dispatched their respective Heinkel He 60s for wide-ranging searches.
At this moment, the U-16, included in the attack sequence, unexpectedly spotted the target convoy west of the Azores. From the evolving situation, it was clear that a one-sided "slaughter" was inevitable.