The swastika markings were an aircraft recognition marking that was only used when the ships were in waters where there was friendly air cover. The Luftwaffe sank two German Destroyers early in the war and the navy used bigger and brighter recognition markings thereafter. In the case of Bismarck, the marking was either covered with a dark grey tarpaulin or painted out when she left Norwegian waters. There would be no point in leaving the red background on show when passing round the British Isles as the RAF were well aware of its use. It would have been covered or painted out at the same time as the Baltic camouflage stripes were painted out. Bismarck was unusual in that the swastika was aligned square to the fore and aft axis of the ship, whereas most ships had the swastika at 45 degrees. If you look at banners carried on parades you will see that some are vertical and some are at 45 degrees; the orientation was not specified when the insignia was originally designed. It is illegal in Germany to display the Swastika, so most models made in Germany or made for the German market do not display swastikas or display them as covered.

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That’s generally the case but if you carefully review the two books you will find a few examples where there is no red. Only the black swastika on a white circle.

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In all drawings of German Naval Camouflage Vol. 1 and 2 by E. Leon and J. Asmussen I only remember the red background. Perhaps the grey background confusion comes from reviewing black and white pics?