[3] In October 1896, Samuel P. Ely traveled from Kelley's Island, Ohio to Duluth, Minnesota, in tow of Hesper and carrying a load of limestone.

A storm had impeded their progress to Two Harbors, with heavy headwinds and high seas, and Hesper was barely able to make it into port while towing Samuel P. Ely.

Around 8:00 in the evening, Hesper had to cast off the towline, and although the crew of Samuel P. Ely dropped the anchors, they were unable to hold the ship, and she drifted toward the breakwater.

Finally, around 3:00 in the morning, Samuel P. Ely sank, although the crew was able to escape drowning by clinging to the rigging of the masts.

[4] The next morning, many residents of Two Harbors were watching the scene from the shore, but any plan to rescue the crew was complicated by the possibility of the tugboat becoming entangled on the breakwater as well.

There were also reports that divers had removed parts of the red oak deck planking to make furniture and picture frames.

In 1994, a group of concerned divers began a project to preserve Samuel P. Ely, since the deck was starting to collapse into the hull.