In 1905, Defoe Shipbuilding Company found its start as a small wooden boat business. The company was formed in a partnership between two Defoe brothers, H.J. and F.W., and the start-up operated under the name Defoe Boat and Motor Works. The company started out building fishing boats, but with the advent of the gasoline engine, Defoe Shipbuilding moved into making cruisers up to 65 feet in length. Two of Defoe's larger cruisers, one a 57 footer and the other a 65 footer, were sold to the government to be used during WWI.
In 1917, Defoe Shipbuilding, located in Bay City, Michigan earned its first government contract for five 40-foot Spent Torpedo Chasers to be delivered at the New London site. Near the end of WWI, Defoe Shipyard received a contract by the Army Transport Service for eight 98-foot steam mine planters, forcing the company to construct a steel building yard. In the years after WWI, the company assembled fifteen 75-foot wooden rumrunner chasers and twelve 100 foot steel chasers.