On August 30, 1937, five weeks short of her 50th birthday, Tarpon was loaded as usual at Mobile for her next journey east. And, as usual, her captain loaded as much cargo as he could fit on the steamer. As she left Mobile, she had over 200 tons of general cargo aboard, most of which had been loaded through four side ports.

The ship made port in Pensacola and departed for Panama City the evening of August 31. She had taken on, in addition to her cargo of flour, sugar, canned goods, and beer, a quantity of iron for the paper mills. Almost 200 barrels of fuel oil were in her tanks, as well as some 15 tons of fresh water carried forward in the hull. As Tarpon rounded the sea buoy and made for St. Andrews Bay, her freeboard was less than five inches.

At 2 a.m. (September 1) the engineer was awakened and informed that the bilge pumps were having difficulty keeping water pumped from the bilges, due to a leak in the bow that was steadily increasing in rough seas. The ship began to list to port as the men worked the pumps. Several barrels of flour were jettisoned until the steamer returned to an even keel. Just before dawn, the winds reached gale force, and the pounding seas began to pour through Tarpon's wooden bulkheads, causing her to list to starboard. The first mate turned Tarpon toward shore, intending to try to beach her before she sank. Captain Barrow emerged from his cabin to receive the engineer's report that the ship was out of control. He ordered more cargo overboard, and then steered Tarpon back on course. But the steamer was settling down into the sea by the stern. With no radio to call for help, 18 of the 31 on board, including Barrow, lost their lives to the sea.