After Denmark surrendered to Germany in 1940, Great Britain invaded Iceland, a Danish protectorate, to prevent its use by Germany in the Battle of the Atlantic. When The US approved the Lend-Lease Act, one of the leased bases was Iceland and the US 6th Marines garrisoned the island (which freed the British garrison to fight).

On 17 Aug 1941, the unescorted Longtaker, a Panamanian flagged steam merchant was enroute to Reykjavik to resupply the garrison with food and timber. Panama, though also technically neutral, was an American protectorate due to the Canal Exclusion Zone in all but name. The Longtaker was spotted by U-38, and sunk with torpedoes. The Longtaker sank in under a minute, and six of the 25 crewmen survived, but three more would die before they were picked up by a US destroyer 20 days later.

The Longtaker Incident was the first US ship sunk in the Atlantic, and the first of a series of encounters that directly led to FDR relaxing the US Navy’s ROE. Within a month, a state of undeclared war existed between the US Navy and the German Kriegsmarine around the world, months before Pearl Harbor.