Built for duty in the Asiatic Fleet on the Yangtze River, Panay had as her primary mission the protection of American lives and property frequently threatened in the disturbances that the 1920s and 1930s brought to a China struggling to modernize, create a strong central government, and later counter Japanese aggression. Throughout Panay’s service, navigation on the Yangtze was constantly menaced by bandits and soldier outlaws, and Panay and her sister ships provided protection for American shipping and nationals, as other foreign forces did for their citizens. Often detachments from Panay served as armed guards on American steamers plying the river. In 1931, her commanding officer, Lieutenant Commander R. A. Dyer, reported, "Firing on gunboats and merchant ships have become so routine that any vessel traversing the Yangtze River sails with the expectation of being fired upon. Fortunately," he added, "the Chinese appear to be rather poor marksmen and the ship has, so far, not sustained any casualties in these engagements." As the Japanese moved through south China, American gunboats evacuated most of the embassy staff from Nanking during November 1937. Panay was assigned as station ship to guard the remaining Americans and take them off at the last moment. Panay evacuated the remaining Americans from the city on 11 December, bringing the number of people aboard to five officers, 54 enlisted men, four US embassy staff, and 10 civilians, including Universal News cameraman Norman Alley, Movietone News’ Eric Mayell, the New York Times's Norman Soong, Collier's Weekly correspondent Jim Marshall, La Stampa correspondent Sandro Sandri and Corriere della Sera correspondent Luigi Barzini jr. Panay moved upriver to avoid becoming involved in the fighting around the doomed capital. Three American merchant tankers sailed with her. The Japanese senior naval commander in Shanghai was informed both before and after the fact of this movement.
Sunk by the Japanese
On 12 December 1937, Japanese naval aircraft were ordered by their Army to attack "any and all ships" in the Yangtze above Nanking. Knowing of the presence of Panay and the merchantmen, the Imperial Japanese Navy requested verification of the order, which was received before the attack began about 13:27 that day. Although there were several large American flags flown on the ship under the command of Lieutenant Commander James J. Hughes, as well as one painted atop the cabin, the Japanese planes continued strafing and bombing. Panay was hit by two of the eighteen bombs dropped by three Yokosuka B4Y Type-96 bombers and strafed by nine Nakajima A4N Type-95 fighters. The bombing continued until Panay sank at 15:54. Storekeeper First Class Charles L. Ensminger, Standard Oil tanker captain Carl H. Carlson and Italian reporter Sandro Sandri were killed, Coxswain Edgar C. Hulsebus died later that night. 43 sailors and five civilians were wounded. Two newsreel cameramen were present on Panay, Norman Alley and Eric Mayell, and were able to take considerable film during the attack and afterward from shore as Panay sank in the middle of the river. The newsreels are now available online at usspanay.org. A formal protest was immediately lodged by the American ambassador. The Japanese government accepted responsibility, but insisted the attack was unintentional. They claimed that the pilots could not distinguish between Chinese and American flags from the distance of 300 or more yards that the pilots attacked. A large indemnity was paid on 22 April 1938 and the incident was officially settled; however, further deterioration of relations between Japan and the United States continued. Fon Huffman, the last survivor of the incident, died in September 2008.
