August 13, 1917 off the northwest coast of Ireland a topsail schooner flying the Swedish flag was en route to an unknown destination, she was being trailed by a submarine. The submarine was her companion and not an enemy, it was HMS D-6 under command of Lt. Cdr. William R. Richardson. The unassuming schooner was the former German ship Else, the first ship taken as a prize by the British in the Great War, however she was sailing under an appropriate new name, HMS Prize Q-21.

HMS Prize was under the command of Lt. Cdr. William E. Sanders, V.C., R.N.R., the only wartime commander she ever had. Sanders, a New Zealander, won his V.C. while in command of HMS Prize on Apr. 30, 1917 in an action against SMS U-93, the U-boat was not sunk, but during the action her commander was captured and the boat was damaged.

On this day HMS Prize and HMS D-6 were acting in concert in the hope of confronting and destroying a German submarine and their chance would come at 1630 hours when a U-boat running on the surface was sighted. The commander of SMS UB-48, Oberleutnant zur See Wolfgang Steinbauer moved cautiously toward the ship as the Germans were aware of the use of decoy ships by now, in fact HMS Prize was herself known as a Q-Ship by the Germans for after the action against U-93 the Kaiser had made sinking HMS Prize a priority.

Steinbauer was en route to the Mediterranean, but was allowed to sink what he could on the way, the day before he sank the cargo ship Roanoke of the Furness, Withy & Company line. As he approached the ship Steinbauer fired a warning shot which caused the ship to heave to, then Steinbauer ran up a signal flag instructing the crew to abandon the ship, which the panic party did with all the customary movements of a frightened group of merchant sailors, however Sanders and the rest of his men laid low in silence waiting for their chance.

Steinbauer moved cautiously around the ship observing every detail, he saw no movement, no evidence of life onboard, nothing to make the veteran U-boat commander suspicious. When the lifeboat containing the panic party began to move back toward the ship, Steinbauer fired a shot over their head to keep them back. The U-boat moved to within about 275 yards of the drifting ship and ordered his gun crew to open fire, at about the same time Sanders gave the order to open fire on the U-boat and before UB-48 fired a shot the White Ensign had been hauled up and the boat was under attack.

As the boat was raked with machine gunfire from the forward Lewis gun, the gun crew managed to get only one shot away before shells from the 12 pounder began to fall around the boat. Steinbauer made an emergency dive and escaped with only very minor damage, but Steinbauer was determined that his attacker would be his next victim. He made several attempts to move into a position to fire a torpedo, but each attempt was thwarted by Sanders changing course just at the right moment, Steinbauer was quite amazed at the skill of the his opponent, but as it turns out it was not so much skill as it was observation. During the battle a fragment had damaged the signal mast and every time Steinbauer raised his periscope the flag which was hoisted to signal abandon ship went up with it. Sanders and his men could clearly see the flag and changed course accordingly.

As the day turned into night Steinbauer, who by now had figured out why Sanders was able to avoid being torpedoed, continued the search for the perfect position, but as darkness fell he lost track of the ship. Sanders and Richardson in D-6, which had been out of position when the action took place, rendezvoused and discussed the battle and decided to continue the patrol.

Steinbauer searched in the darkness, but was unable to locate his prey until just before 3am on August 14, 1917 when he saw a flash of light and made for it. Nobody knows what the light was, but the tiny spark on a dark ocean was enough to give away the position of HMS Prize. Steinbauer fired a torpedo which missed, it is doubtful that anyone on HMS Prize even saw the torpedo, but Steinbauer moved closer and fired a second torpedo which found the mark and forty -five seconds after it left the tube HMS Prize exploded with tremendous force sinking immediately. Richardson in HMS D-6 heard the expolsions, but again was too far out of position to react. As dawn was approaching and there was some light Steinbauer moved into the area where HMS Prize had been, according to him all that was found was wreckage and one sailor in a lifebelt who was taken aboard the boat where the crew tried to revive him, but failed. HMS Prize and her twenty-seven man crew were all lost.

Steinbauer survived the war and the next war as well, he was later awarded the Pour le Mérite (Blue Max). Wolfgang Steinbauer died in 1978.