California sailed on her last voyage from New York on 29 January 1917 with 184 crew and 31 passengers. On the morning of 7 February when homeward-bound and approaching Ireland under full steam, she was attacked by U-85 in a surprise attack. 

The German submarine, under the command of Kapitanleutenant Willy Petz, fired two torpedoes at California; one struck the ship squarely on the port quarter near the Number 4 hatch. Five people were killed instantly in the explosion; thirty-six people drowned either as the ship went down or when one filled lifeboat was swamped in the wake of the burning vessel, which plowed ahead losing little headway as she went down. She sank in nine minutes, 38 miles (61 km) W by S of Fastnet Rock, Ireland with a loss of 41 lives.

Though Captain John L Henderson stayed on the bridge through the entire incident, and subsequently went down with the ship, incredibly he made his way to the surface and was rescued.

Fred's ship, HMS Jessamine, was nearby and went to the rescue. Although, not a good swimmer, Fred jumped into the sea and rescued a woman desperately clinging onto two children.

According to the Royal Navy, on 12 March 1917 the Q-ship HMS Privet avenged the sinking of California. Posing as an unarmed merchant vessel, the crew of Privet lured U-85 to the surface after sustaining heavy damage in an unprovoked attack by the submarine. As Privet’s highly trained crew feigned abandoning ship, they uncovered the ship’s hidden guns and opened fire on the submarine at close range. U-85 was sunk by gunfire, and Kapitanleutenant Petz and his crew of 37 men were killed.