The course of events were reconstructed by Naval Intelligence when they interviewed the German prisoners following the sinking of ‘S 38′:
At 0158 B.S.T. on Wednesday, 20th November, 1940, H.M.S. “Campbell” and H.M.S. “Garth” sighted “S 38″ at a distance of two miles in position three miles north of 54 E Buoy (approximately 12 miles east of Southwold). Prisoners stated that the first indication of the presence of the British was the sight of a destroyer to starboard of “S 38.” The destroyer, indistinctly seen beyond bands of mist, seemed fairly far away, but it was quickly realised that she was actually much closer, only about 400 metres distant and was steaming straight towards them.
It was stated by the E-Boat’s Telegraphist that a message was passed on R/T to the other E-Boat warning her of the presence of the British destroyer. The Commanding Officer of “S 38″ ordered his ship to be turned towards the destroyer and the starboard torpedo (No. 1 tube) to be fired, but the man at the torpedo tube was not ready and part of the safety gear was damaged; this prevented the firing of the torpedo. “S 38″ then turned to port to make off according to the tactics laid down for E-Boats after attempting or making an attack.
Prisoners stated that a torpedo was then fired as the E-Boat turned further to port. There were conflicting statements as to whether this was the port or the starboard tube. But no aim had been possible and there was no chance of the torpedo hitting the destroyer. The Germans then saw on their port side the second destroyer, of whose presence they had been unaware. Prisoners maintain that up to that moment the British had not sighted “S 38.” “Campbell” and “Garth” were in single line ahead.
On sighting the E-Boat “Campbell” quickly opened fire with close range weapons. “S 38″ was hit on the port side; the first salvoes wrecked the steering-gear, lighting system and engine-room telegraph, and a shell hit the fuel tank. The bow of the boat and also the starboard torpedo tube were damaged. Prisoners stated that their vessel was hit on the port side seven or eight times. “S 38″ attempted to escape, tried to lay a smoke screen but, owing to the damaged steering-gear, could only go round in a curve. One engine was put out of action and a fire started in the fuel tank. Some men jumped overboard immediately the fire broke out. A seaman ran aft with the intention of dropping depth charges in the course of the pursuing destroyer, but a burst of machine-gun fire from the British discouraged this attempt. The Germans threw themselves flat on the deck, taking what cover they could behind their two spare torpedoes.
According to the prisoners, H.M.S. “Campbell” passed immediately ahead of “S 38’s” bow and continued to fire at a range of only 20 metres. The Germans did not attempt to use their machine-gun. The E-Boat was caught in the destroyer’s searchlight, and the German Commanding Officer ordered the German war flag to be hauled down. An effort was made to move the wounded aft, as the boat was sinking by the bow.
At 0225 “S 38,” on fire and badly damaged, sank; prisoners maintain that she did not capsize, as claimed by the British. The destroyers picked up 18 survivors, including the three officers. Five men of the crew lost their lives. All three officers and seven other members of the crew were injured; the remaining eight men were unwounded.
The full report, with details of the interrogation of prisoners can be read at U Boat Archive