The USS Panay (PR-5) was one of 5 United States gunboats built in the 1920s designed to patrol the waterways of the Yangtze River in China. Although it remains a footnote in history, the ship was the first U.S. military casualty in World War II.
In the weeks before the fall of the Chinese capitol of Nanjing the U.S. embassy was evacuated with the Ambassador and most of his staff leaving on the USS Luzon on November 22, 1937. The few remaining left, including some civilians and foreign nationals, left on December 11th on the USS Panay. The Panay was also escorting 3 Standard Oil barges up the Yangtze and accompanied by several British vessels. Early on the ships were fired upon by a shore battery commanded by Colonel Hashimoto (Who would later order the bombing), in an attempt to lead the United States into war with Japan. However, the shooting was so random that little damage, if any was done and the ships slipped out of range 2 miles later.
Late the next morning (December 12th) the Panay and barges anchored off Hoshien and raised U.S flags. Sunday breakfast was served. No one expected anything, the guns were still covered when at 1:30 PM 3 Japanese naval planes dropped a total of 18 bombs on the ship, disabling her forward 3-inch gun, destroyed the pilothouse, sick bay and fire room, wounded the captain (Lieutenant Commander J.J. Hughes) and several others. Following the inital attack, 12 more planes released bombs on the Panay and an additional 9 fighters began strafing the near defenseless ship. A little more than 30 minutes later the ship was effectively lost, as all power and propulsion were disabled and the main deck was awash. Hughes ordered the ship to be abandoned and as the survivors made it to shore, they too were strafed, both in the shore reeds and in the river.
Although it took some time afterwards, the survivors managed to report the attack to U.S. Admiral Yarnell and were taken on board USS Oahu and HMS Ladybird two days later. Two bluejackets and one civilian passenger died of their wounds; eleven officers and men were seriously wounded. Amazingly, the footage of the attack taken by foreign (Japanese allies, Italian!) journalists aboard and made it to the U.S. where President Franklin D. Roosevelt subsequently ordered the film to be censored, deliberatly hiding the obvious "red sun" symbol of Japan. Another curious point is why this did not lead directly to war. It was the result of what appeared to be sincere Japanese apology despite a U.S. miltary inquiry in Shanghai that concluded that the attack was deliberate and the Japanese excuse of the flags mistaken for those of China was just a ploy. However, FDR was eager to avoid war and accepted the excuse.
Chang, Iris. The Rape of Nanjing