On June 7, 1902, the Thomas Wilson was outbound from Duluth Harbor carrying a cargo of Mesabi iron ore. At the same time, the 2,073-ton wooden steamer George Hadley was inbound. As the weather was clear and calm, the captain of the Wilson took it out of the harbor before its hatches were closed. Half a mile from the pierhead the tug Annie L. Smith hailed the Hadley to divert to Superior Harbor, as all the coal docks at Duluth were full. The captain of the Hadley ordered an immediate turn to port without noticing the Wilson coming toward him or blowing the required whistle signals. The captain of the Wilson, leary of the Hadley's movements but concerned about running aground if he turned to port, ordered a hard turn to starboard. The Hadley collided with the Wilson as they each made their turns. The wooden steamer struck the whaleback forward of the after hatch, then recoiled from the impact. The Wilson heeled over to port, righted and then began to sink by the bow. Within three minutes the stern plunged under the water, carrying nine of the Wilson's twenty-man crew to their deaths. The Hadley barely reached shallow water before beaching itself. It was later repaired and refloated. The Wilson and its cargo were valued at $207,000.

As a result of the collision between the Wilson and the Hadley, new rules were instituted in Duluth Harbor as follows:

1. Ships cannot leave the harbor with open hatches.

2. Ships may not pull out from another ship following a collision.

3. Pilots may not carry out any order given by the captain when another vessel is sighted without first calling the captain's attention to the other vessel.

4. All ships must be equipped with signal systems to all parts of the vessel to warn of danger.