Terrier was built as a private motorboat of the same name in 1917 for Paul Armstrong of Chicago, Illinois, by the Great Lakes Boat Building Corporation at Milwaukee, Wisconsin. Armstrong had her built to a design intended specifically for naval patrol work in connection with the Preparedness Movement, and turned her over to the Navy in 1917 for use as a section patrol boat during World War I. She was commissioned on 1 June 1917 as USS Terrier (SP-960), although her formal acquisition from Armstrong did not take place until 19 July 1917.
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