USS Hatteras of 1,126 long tons was commanded by CaptainHomer C. Blake and was assigned to the West Gulf Blockading Squadron off Galveston, Texas when she was sunk. The steamer had a crew of 126 officers and men and was armed with four 32-pounders and one 20-pounder naval gun. Captain Raphael Semmes commanded the 1,050 ton sloop-of-war CSS Alabama which carried 145 officers and men with six 32-pounders, one 110-pounder and one 68-pounder gun. The encounter between the two vessels was the first combat action of Alabama's distinguished career.
At about 3:00 pm on January 11, 1863, the Hatteras was on blockade duty with the USS Brooklyn and five other vessels off Galveston when a sail was sighted above the horizon. Captain Blake was then ordered to chase the unidentified ship in the Hatteras and to capture the vessel if it proved to be an enemy. The ship was the Alabama and she could not escape. After pursuing the Alabama until nightfall just over twenty miles of sea from Galveston Harbor to a position off Galveston Light, the Hatteras came alongside of the Confederate ship and demanded that the crew identify themselves. The rebels called out HBMS Spitfire to try to confuse the Union sailors so Captain Blake ordered a boat to be filled with sailors and lowered for a boarding. But just as the launch shoved off the Confederates shouted "We're the CSS Alabama", raised their colors, and opened fire with a heavy broadside on the portside of the Union vessel.
In action with CSS Alabama, off Galveston, Texas, on 11 January 1863
The men aboard the Hatteras were surprised but returned fire with their much smaller broadside. For thirteen minutes the two sides dueled in what Captain Semmes later called a "sharp and exiting" engagement. In the end, crewmen aboard USS Hatteras fired a signal gun to announce their defeat, Hatteras was slowly sinking and Captain Blake ordered the magazines flooded to prevent an explosion. Men began jumping into the water and boats from the Alabama were lowered to provide assistance. At the same time a boat with six Union sailors escaped along the coast and evaded the Confederates who were maneuvering to rescue survivors. Two United States Navy enlisted men were killed in action, five were wounded and another 118 taken prisoner. CSS Alabama sustained several shot holes and other damage but Captain Semmes reported that none of it was serious and prevented the vessel from sailing. Two rebels were wounded.
After sinking the Union steamer the Confederates sailed for the South Atlantic, they were chased unsuccessfully by some of the Galveston blockaders but no further fighting occurred. Eventually Semmes made his way to Cherbourg, France where his ship was destroyed by USS Kearsarge in another significant battle. USS Brooklyn discovered the wreck of USS Hatteras the following morning and found that she was resting on the bottom in nine and a half fathoms with only her masts sticking out above the waterline. Her colors were not struck in the battle and were still waving in the breeze when the Brooklyn arrived.