Sorry, Winterhawk 56 and guys, but that is a run-of-mine 1943 (mid-war) Walther, not a pre-war and in nice shape it is worth probably $700-900 retail, not $5000 or $12000. I have no idea where that value information came from, but it is clearly erroneous.
NO P.38's were made in 7.65; a P.38 by definition was a German service pistol, not a pre-war Walther commercial, and service pistols were made only in 9mm Parabellum, not made in 7.65 Parabellum. The first P.38's had no code marking; they had the Walther banner. For a few months, they used the "480" code; the "ac" code was first used in 1940, not in 1937. (The "38" in P(istol).38 is the year of adoption, so there were no P.38's prior to that year. There were Walther HP and MP pistols, but the gun pictured is not one of them.)
Typical good condition P.38 holsters run around $65 with a few topping $100, and original "v" magazines as issued with that pistol run around $65-80. By that time, magazines were not being numbered to the pistol.
What TTUBOB87 has is a nice pistol, and a wonderful souvenir. I see no reason for anyone to deceive him about its value.
Jim