Margaret, was built in 1899 by Delaware River Iron Ship Building and Engine Works at Chester, Pennsylvania, as the private steam yacht Eugenia.

She was not intended for seagoing service, having a quite narrow beam for her length and making her prone to incurring damage in a seaway, and was designed to allow her wealthy owner to entertain people aboard in an opulent setting in a safe harbor.

Her final private owner, Isaac Emerson, the chief executive officer of Bromo-Seltzer, ensured that she had a fine wine galley and an exquisite dining area.

[1] In August 1917,[2] the U.S. Navy purchased Margaret from Emerson for overseas service as a patrol vessel in World War I, paying $104,000 USD for her, $10,000 more than her assessed value of $94,000.

Her impressive wooden civilian masts were replaced by stubbier ones that were more suited to naval service, her dining area was converted into a berthing compartment, and her boom was removed.

[3] After conversion, Margaret's top-heaviness had increased, her stern sagged under the weight of the added naval equipment, and she rode so deep in the water that her portholes were barely above the waterline even when she was in port.

A storm struck on the first night at sea, rendering all but two of the men on board Margaret too seasick to carry out their duties, exaggerating the ship's leaks, and causing the condenser and steering gear to fail; as a result, the ship had to be steered manually with ropes attached to her tiller and there was a shortage of potable water that forced Fletcher to ration water strictly.

Although Margaret managed to get underway again, she ran out of coal halfway to Bermuda and thus lost all power, lights, pumps, and communications, forcing Fletcher to order a bucket brigade to dump water overboard to keep the ship from capsizing.

She rolled heavily, losing her engine room cowl overboard and causing her anchor to give way and run all the way out on 105 fathoms (630 feet or 192 meters) of chain, and her tow line to SC-317 parted.

During this period, a Gunner's Mate Davis, serving as petty officer of the watch aboard Margaret, heard cries for help from the harbor and dived in to rescue a man who had attempted to swim from another boat to shore and became fatigued.

The February 2011 issue of Naval History magazine includes an article, "When Frank Jack Met Maggie," by Steven D. Regan, about Fletcher's tour as commanding officer of Margaret.