THE SINKING OF USS PANAY AND ATTACK ON HMS LADYBIRD AND BEE
In addition to the information appearing below, I would highly recommend The USS Panay Memorial Website. This excellent new site is specifically dedicated to the events surrounding the sinking of USS Panay and definitely worth a visit.
HMS Ladybird and HMS Bee

Damage to HMS Ladybird after coming under fire from Japanese artillery on December 12, 1937, some 20 miles upriver of USS Panay. Note that she has been holed below the waterline and a tarp has been tied around her to stop water entering her hull.
VIDEO CLIPS OF DAMAGE TO HMS LADYBIRD
The following video clip shows the damage to HMS Ladybird after coming under fire from Japanese artillery at the time USS Panay was sunk. Despite her damage, HMS Ladybird immediately sailed to the the last known position of USS Panay. Both she and USS Oahu took the survivors aboard and transported them to Shanghai. The final sequence shows HMS Ladybird arriving with Panay survivors near the Shanghai bund. These excellent images were taken by Eric Mayell who was present on USS Panay as she was attacked and sunk.
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DAMAGE TO HMS BEE
This is obviously HMS Bee with damage from a shell. Although HMS Bee was fired upon by the same Japanese artillery battery that damaged HMS Ladybird, I have seen no mention that Bee was actually hit (in fact, I have seen mention that HMS Bee was not hit). This may constitute evidence that she was damaged and I suspect the matter was played down as Britain was not in a position to open hostilities against the Japanese (the crisis with Germany was getting out of control at about the same moment).
THE JAPANESE ATTACK ON USS PANAY

Several shots of Japanese planes as they commenced their attack on USS Panay. The crew of the Panay had the presence of mind to actually document the event as it happened.


A bomb exploding between the Panay and the Mei Ping.


The Panay's crew returning fire.


Severely damaged and taking water, the order to abandon ship is given. Wooden gratings are thrown overboard for use as floatation devices.

Some of the crew being ferried to shore as the Panay begins to list.


The Panay with her main deck disappearing below the waterline. Note the damage to her upper decks.


USS Panay's final moments as she flooded and rolled beneath the water.
VIDEO CLIPS OF THE SINKING OF USS PANAY
There were two movie photographers on USS Panay at the time she was bombed: Norman Alley of Universal and Eric Mayell of Fox Movietone. The entire incident was therefore filmed and later shown in two different newsreels, "Norman Alley's Bombing of U.S.S. Panay" (about 30 minutes - Universal) and, "The First Pictures of the Bombing of U.S.S. Panay" (about 10 minutes- Fox Movietone).

I managed to locate Eric Mayell's footage of the incident and some video clips can be seen below. The clips are silent as there was no sound recording equipment on Panay when she was attacked. Full credit should be given to Eric Mayell for having the presence of mind and courage to film the incident, an extremely dangerous undertaking.
Footage from Eric Mayell

Evacuation of US Personnel to USS Panay during Japanese Attack on Nanking
The following clip shows the US embassy being evacuated from Nanking to USS Panay (Nanking was then the Capital of China). The bombing of Nanking seen is both from Japanese airplanes and ground artillery.
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Attack by Japanese and Sinking of USS Panay
The following clip shows the attack on USS Panay and the ships she escorts (mostly oil tankers). The attack was by air, lasted about 30 minutes and numerous bombs are seen landing in the water next to the ship. Unfortunately, several of the bombs scored direct hits on the Panay and she was mortally wounded. The US Navy sailor seen manning the machine gun in the foreground is hit by shrapnel and collapses. Blood stained wounded are seen being evacuated from the Panay. The ship seen on fire at some distance is one of the three oil tankers Panay was escorting. The final sequence shows the Panay slowly sinking beneath the waves.
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Journey by Survivors of USS Panay Back to Shanghai
The following clip begins with the survivors reaching shore on a reed covered island in the area. Injured survivors are seen, one of them being Lieutenant Commander Hugh who was wounded by the first bomb. That night the survivors crossed the Yangtze from the island and and made their way to a local village which is shown. Receiving word that HMS Ladybird and USS Oahu are now present, the survivors are seen leaving the village and returning to the Yangtze to be rescued. HMS Ladybird and USS Oahu are then seen in Shanghai with the Bund in the distance. USS Oahu is seen tied up to USS Augusta, the US flagship on the Yangtze. Finally, some survivors and the dead are seen coming aboard USS Augusta.
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Footage from Norman Alley
I recently discovered World War II Multimedia Database, an excellent site presenting video footage of WWII. I wish to thank their site for permitting the clips below to be viewed through this page. I assume the footage is from a portion of Norman Alley's work documenting the attack. (Note: The higher resolution version can be download in a few seconds with a broadband connection. Those connecting to the internet via a telephone modem will require a a number of minutes (you can use the lower resolution version which is quicker, but the quality not is nearly as good).

Copyright is to Madacy Entertainment and this video cannot be reproduced in any manner without their permission.


The clip was originally in Mac (MOV) format and I also converted it into Windows (WMV) format, albeit not very well.

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FINAL FACTS
USS Panay sank approximately 28 miles upriver from Nanking and, at the time of the attack, she had just evacuated the final US embassy staff (along with some other US civilians) from Nanking. With these individuals onboard, she had begun escorting three Standard Oil tankers (Mei Ping, Mei An and Mei Hsia) upriver. Following the Japanese air raid, a Japanese landing craft appeared and began machine gunning survivors. Japanese aircraft returned and sank two of the tankers Panay had been escorting.

News of the sinking of Panay only reached HMS Ladybird and HMS Bee the following day. They steamed south, discovering two burning wrecks and the Panay's bullet ridden launch. Three American ratings were killed and over forty crew members injured.


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