However, the United Kingdom seized her as part of Germany's World War I reparations to the Allies under Article 231 of the Treaty of Versailles.

A number of City of Bagdad's crew died in captivity, either aboard Atlantis, or in Italian Somaliland.

She had a single screw, driven by a three-cylinder triple-expansion engine that was rated at 3,600 ihp[2] or 347 NHP,[6] and gave her a speed of 12 knots (22 km/h).

She called at Cape Town; East London; and Durban in South Africa; and Lourenço Marques (now Maputo) in Moçambique, before reaching Bombay (now Mumbai) on 11 November.

She called at Colombo in Ceylon; Lourenço Marques; Cape Town; and Saint John, New Brunswick; and on 3 February 1940 reached Boston.

HX 26 was bound for Liverpool, but City of Bagdad detached and continued to Portland, where she arrived on 26 March.

This was a North Sea northbound convoy to Methil in Scotland, but City of Bagdad detached for Hull, where she arrived on 31 March.

[15] On 28 April 1940, City of Bagdad left either Hull or Immingham, and by 20 May she was leaving Middlesbrough to join Convoy FS 174.

The British ship's Master, Captain J Armstrong White, disregarded the instruction, and ordered his wireless telegraphist to transmit the distress signal "QQQQ", meaning "A Q-ship is attacking me".

[18] Atlantis started transmitting with her more powerful radio, which jammed the latter part of City of Bagdad's distress signal.

Atlantis ceased fire, and signalled City of Bagdad's crew to remain aboard their ship.

Captain White interrupted dealing with the confidential documents in order to try to calm the crew, who continued to lower the lifeboats and abandon ship.

[22] A US Liberty ship, the Prudential Steamship Corporation's Eastern Guide, received City of Bagdad's incomplete signal.

It was commanded by his adjutant, Ulrich Mohr, who captured Captain White in his cabin, along with UK Merchant Navy fleet codes and Admiralty routeing instructions.

[28] A prize crew of 12 German ratings, commanded by a Lieutenant Dehnel, sailed Durmitor to Italian Somaliland.

[30][31] In March 1941, British, South African, and Somali troops invaded Italian Somaliland, liberated Allied prisoners of war held there, and evacuated them to Kenya.