Because of its heavy concentration of industry, Birmingham was popularly believed to be the second or third most important city on Germany’s list of vital targets. Pittsburgh and possibly New York would be hit first, followed by Birmingham. …

Fear of Axis espionage and sabotage grew more frenzied following the arrest in late June 1942 of two groups of German agents who, along with explosives and a considerable amount of cash, had been put ashore by German submarines. One group landed on a remote stretch of beach just south of Jacksonville, Fla. The second sabotage team paddled to a beach on Long Island, N.Y. The apprehension of these saboteurs, followed by their highly publicized secret trials and the execution of all except two who cooperated with the FBI, created an atmosphere of distrust toward aliens throughout the United States. Coastal dimouts, urban blackouts, and air-raid drills fanned American paranoia.

– Forth to the Mighty Conflict:

Alabama and World War II by Allen Cronenberg

“It’s the truth,” Victor said. “I was driving that boat off Point Clear. I hit it. I ran up on it. I climbed on it while it was sinking. It sunk your boat. I nearly got drowned.”

Butch snorted, drumming his hands on the cage. “And I reckon ol’ Hitler was driving it too.”

– V for Victor by Mark Childress

Editor’s note: This is the second of a two-part series about the tale of three Fairhope children’s incredible sighting of a small German submarine in Mobile Bay in 1942 — and of what happened next. Last week’s installment ended with Lila, 10, Buddy, 8, and Wilma, 12, telling their father, Joseph “Capt. Penny” Pennington Sr., what they had seen, which included a man flashing a light toward shore, as if signaling someone.

Sadly, the children’s mother had died the previous year, leaving six children in the care of their father, who was stationed at Brookley Field with a civilian service helping the war effort. His eldest three children had gone off to serve in the year following her death, two boys to military service and daughter Elsa, to work in a war uniform factory in Michigan.

In this final installment, Capt. Penny had just come home for the weekend to see his three youngest children, who lived at the family home on Grand Avenue. That street ends at a gully leading to the beach where they all gathered that Friday night, and was just down the street from where an alleged German spy lived at the Larson Hotel.

“We were are all very quiet, sitting on a log, and pretty soon it came up,” said Lila Pennington Ryals of that night in late summer or early fall 1942, when her father and two siblings waited on a Fairhope beach for the impossible to happen.

“It was probably 400 yards off the beach,” Lila’s brother, Joe “Buddy” Pennington Jr., said last week, sitting not far from where he spent much of his childhood growing up and seeing something he knows not everyone is going to believe. “But those are the facts.”

Their eldest sister, Wilma, when visited last week, also confirmed the story of seeing a small submarine surface off that beach, and then signal someone with a flashing light, and also seeing that signal answered from a high bluff near Fly Creek.

“We told him the story together,” said Ryals, of their conversation earlier that day with their father. “He made us repeat a lot of what was said to try and trap us and see if we were making up the story. But we said, ‘No, this is for real, and you’d better come down and see for yourself.”

All three Penningtons say their father, who was a well-known commercial fisherman with a seafood shop on Fairhope Avenue, worked for a civilian service that required him to patrol Mobile Bay and keep tabs on who was out there.

“He had a list of names of people that weren’t supposed to be on the water,” Buddy said. “If he caught them, he’d turn them in.”

After the heavy loss of American ships sunk by U-boats in the Gulf of Mexico during the spring of 1942, civilian boats were used to patrol coastal waters, according to Allen Cronenberg, in his book on Alabama during World War II. He said that civilian fleet was popularly known as Hooligan’s Navy.

“Civilian commodores were given appropriate temporary rank in the Coast Guard Reserves, and their vessels were equipped with radios and weapons,” Cronenberg stated.

Wilma said her father captained an “85-foot crash boat” assigned to him that was used to pick up debris from airplanes and possibly humans whose lives were sometimes lost in those training flights.

“So, that’s what you’ve been talking about,” Capt. Penny said that Friday night, according to Lila, who said they saw the submarine together again on Saturday night, before her father returned across the bay to Brookley Field on Sunday morning.

Buddy said, “After reporting it to poppa, he told us, ‘Don’t say anything to anyone else about it because you’ll be in danger.’ So we didn’t.”

A couple of blocks from where they grew up, a house still stands on a bluff overlooking Mobile Bay that Lila pointed out recently. She said that house on North Mobile Street was once known as the Larson Hotel, run by a Swedish woman named Mrs. Larson, who was a good friend of their mother. She said it also shared space with the local VFW post. A Fairhope resident confirmed recently that the VFW post was located there, until it moved to its present location on Nichols Avenue in the late 1980s.

A man lived at that hotel who also had a small stable of Shetland ponies and horses for riding. He also had a German last name and accent, the siblings say.

“It was a front for him, I guess,” Buddy said. “After we told (our father) about it, the first thing we knew his whole outfit was gone. Later I asked him whatever happened to that man and was told he was a German spy and had ended up in a prisoner’s camp out west or somewhere.”

[Although the Penningtons shared the name of that man, it is not used here because neither his existence nor his detention could be verified by press time.]

All three Penningtons are convinced of what they saw but understand that not everyone will believe them. Lila said she decided to share the story now, because she is not getting any younger, and she thinks it is important that a record be made of it. To that end she recorded a video of her story recently at the Fairhope Museum of History.

“Now, I have to tell you, if this happened, it’s a very well-kept secret,” said Michael Thomason, an emeritus professor of history at the University of South Alabama. “Never has anything like this been reported. My first reaction to this is that this is yet another one of the stories that were going around then. Admittedly, the people are telling a rather more elaborate tale and account than you normally get, I guess. But that is a long way between that and the fact that it happened.”

Cronenberg, who also wrote a book about U-boats in the Gulf of Mexico, also doubted the Penningtons’ story. He did say the Germans had some midget subs, but they were used along the German coastline and were not very effective. He also said the bay was generally too shallow for U-boats.

“There are a lot of legends around here about just this subject,” said Mark Childress, who wrote the 1988 novel, V for Victor, about a 16-year-old boy’s encounter with a U-boat in Mobile Bay in 1942. “I lived in Point Clear when I was a little child and there were legends back then that everybody always told of Nazi U-boats in the bay, or just outside the bay, and spies at the Grand Hotel was a common theme.”

Childress said he did extensive research for his novel and doubts seriously that a small sub actually surfaced in Mobile Bay, much less that it was involved in local espionage.

“I have never found confirmation of a single German spy anywhere in the South,” he said. “I set most of the action of the book in May 1942, which was the month with the greatest loss of ships of any month during the war. There was a lot going on out there, and I think that is probably the basis of a lot of these legends. I think it comes from kids who were excited, and who were part of the coast watch. Who knows what her dad did, and what (they have) embroidered into it. Or (they) could be telling the absolute and honest truth. But nothing she says makes any sense of what I know about World War II in Alabama. But that doesn’t mean that nothing happened.”

But the Pennington children’s experience and their own eyes tell them a different story, one they do believe.

“It made my hair stand up on end,” Buddy said. “It was scary.”

One thing that gives credibility to their story is how none of the siblings seemed to have worked to make their stories all align. There were some small differences in each of their versions, and they even learned a few things as they shared stories with one another. One of the most interesting came from Wilma, regarding something that Lila did not remember.

She said there was a Red Cross station at the bluff in Henry George Park where the Baldwin Pops Symphony plays now.

“We’d go down there every day after school and roll bandages for the soldiers,” she said. “We were real patriotic kids.”