The 38-40 Winchester was developed by Winchester in 1874, as a companion to the 44-40. It is based on the 44-40 case necked-down to what is actually 40-caliber. It was originally a blackpowder cartridge chambered in the Winchester Model 73 lever action. The 38-40 was at one time a popular medium-power cartridge. Winchester used to load a high-velocity rifle version with a 180-grain bullet at 1775 fps. This was considered a pretty good short-range deer number, but was not intended for old blackpowder rifles or revolvers. With proper load and bullets, the 38-40 can be used on small game, varmints, medium-size game or even deer at short range. 

This text is based on information from “Cartridges of the World”, Hodgdon reloading manual, the cartridge designer and/or own resources.