The ship was built in 1889 by J. H. Dialogue and Sons, Camden, New Jersey, as the tug Defiance and commandeered by the Navy from the Shipowners & Merchants Tugboat Co., San Francisco, California, on 13 June 1918, delivered on 24 June, and outfitted at Mare Island Navy Yard. Commissioned as USS Defiance (SP-1015) on 29 July 1918, with Lieutenant M. J. Downes, USNRF, in command. She was renamed USS Challenge on 15 August 1918.
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