In April 1922, the vessel left the Canal Zone and proceeded to the Mare Island Navy Yard, Vallejo, California, where she arrived on 29 March 1922 and began deactivation preparations.

The highlight of her service during this period was a mission of mercy late in June 1925, when the tug carried emergency supplies to victims of the 1925 Santa Barbara earthquake.

Upon completion of this assignment, the ship returned to Norfolk and remained in the Hampton Roads area through June 1942 performing various towing duties.

In July 1942, Algorma sailed to the Caribbean and participated in fleet exercises, towing targets for vessels and shore batteries.

Among her ports of call were San Juan, Puerto Rico; Charlotte Amalie, United States Virgin Islands; Trinidad; Guantánamo Bay, Cuba; and Willemstad, Netherlands Antilles.

Upon the completion of the yard period, she sailed, via the Panama Canal, for the west coast and arrived at San Francisco, Calif., on 25 August.