The "orginal" .38 Special ancestor was the .38 Colt, later re-named the .38 Short Colt when the .38 Long Colt came out. Neither of these two cartridges set the world on fire (altough the .38 Long Colt was our standard military pistol cartridge from around 1892 to about 1909.)
To understand the .38/.357 issue, we have to go back to the Civil War, where the cap and ball revolver ruled.
With a cap and ball revolver the chambers are not drilled all the way through the cylinder -- a wall or floor is left at the back of the chamber. Then a smaller hole is drilled through, threaded for the nipple.
To load a cap and ball revolver, the chamber is filled with a charge of black powder, and a ball is rammed on top of that (most cap and ball revolvers had a compound lever rammer attached to the barrel for that purpose). Then the mouths of the chambers were smeared heavily with grease -- absolutely essential for firing a bare lead ball in a rifled barrel -- and the nipples capped.
Notice that this arrangement requires chamber, ball, and barrel to be the same diameter -- the ball must fight tightly in the chamber, and can be neither much bigger or smaller than the bore.
When metalic cartridges came along, the simple thing was to bore the chambers all the way through, add a loading gate, modify the nose of the hammer, and voila! a "modern" cartridge revolver!
But there was a problem. The bullet had to fit in the case mouth, and the case had to fit in the chamber -- which meant the bullet now had to be SMALLER (by twice the thickness of the case walls.)
The solution was the "heeled" bullet -- the base of the bullet was made smaller than the rest -- like the current .22 LR bullet. The forepart of the bullet was the same diameter as the chamber and bore.
Remember the grease that has to be added when firing a lead bullet in a rifled barrel? That grease was smeared on the bullet now, and it got rubbed off when carrying ammo in the pocket, washed off by the rain when carrying in belt loops while on the trail, and picked up grit and grime.
The solution to THAT was to make grooves around the bullet, fill the grooves with grease, and seat the bullet so the grooves were below the case mouth (this is called "inside lubricated" ammunition.) That worked, but you now had too much bullet in the case, and making the rest of the bullet bore size didn't work any more.
What to do? Make the chamber larger, or the barrel smaller? For practical purposes, it was better to make the barrel smaller, and leave chamber and case dimensions the same. The bullet that used to be around .380" was now only .357" or .358". For a long time, the new .38 ammo was loaded with soft lead bullets with hollow bases, which could also work in the older, larger bores.
The Army abandoned the .38 Long Colt in 1909 (re-adopting the .45 Colt in the Model 1909 revolver until an automatic could be developed and put into service), but police liked the smaller, less powerful .38s. Smith and Wesson got the idea that they could load the .38 to higher pressure and make it a more effective cartridge. To make sure the new .38s could NOT be fired in older, weaker revolvers, they made the case a bit longer, producing the .38 Special.
By the 1930s, the .38 Special was the overwhelming choice for police. But that was the era of the "motor bandit" -- John Dillinger, Machinegun Kelly, and so on. Thirty-eight specials would not reliably penetrate steel car bodies in pursuits. So Smith and Wesson chambered their Hand Ejector revolver (designed for the .44 Special) for .38 Special, and developed a very high pressure .38 Special load.
They called both revolver and ammo "38/44" and ammo makers printed warnings on the cases, "For use in 38/44 Revolvers ONLY." Before long, someone woke up and smelled the coffee -- it's only a matter of time before someone loads a 38/44 round into an older, weaker .38, and KA-BOOM.
So Smith and Wesson and Winchester teamed up and stretched the .38 case again, creating a new, longer cartridge that couldn't be fired in .38 Special chambers. This time, they named it by the correct caliber, ".357 Magnum."
You can safely fire .38 Short Colt, .38 Long Colt, and .38 Special ammunition in any .357 Magnum revolver.