Eskimo's used .22s for polar bear, hell they use .22's for everything. The most desireable gun up there for them is one of old Remington Nylon 66's in either brown or the black apache model at least back in 71 or so when I spent some time on adak. One of those 66's and a couple of bricks of .22LR's would get you a pair of handmade/chewed mukaluks and a seal skin parka.
As for that 32's groupings it's not the guns fault, guaranteed every gun I have ever seen is capable of shooting better than the shooter Try it from a machine rest.
You can find some good information on the Colt 1903 "Pocket Hammerless" at www.coltautos.com. They were very popular back in the days before World War 2, but were discontinued by Colt because they were too complicated and expensive to make. I have one in the larger .380 caliber, called the 1908.
Take care of that critter, because values of vintage Colt pistols are rapidly climbing. I'd guess it's worth about $600 or so in its current condition. Also don't have it re-blued, because that kills off the value in a collector's eyes.