For nearly three years following modernization, "Arthur Foss" was utilized primarily for coastal tows to California, Oregon, and Alaska, based mostly out of Tacoma. The tug set several speed and tonnage hauled records, most notably while towing large lumber schooners down the coast to California. The most famous of these voyages occurred in 1936 under the command of Captain W. B. Sporman when, battling bad weather the whole time, "Arthur Foss" towed the large four-masted schooner "Commodore", loaded with of lumber, from Oregon to Los Angeles in a record seven days. During this period the tug also frequently towed log rafts, ships, and barges along the Inside Passage as it had during the gold rush. Disaster struck on 18 February 1937, when a severe fire broke out in the forward crew quarters. In order to save "Arthur Foss", Captain J.M. Bowers deliberately steered the tug into shallow water near Discovery Bay and sank it, extinguishing the fire. Several other vessels came to assistance, and "Arthur Foss" was refloated and taken to Tacoma for repairs.