Clarence was built in 1841 by William Lowe at his Deptford shipyard on the Williams River in NSW.

Caption – William Lowe’s Deptford shipyard near Clarence Town on the Williams River, NSW in about 1842 (Enlargement from a watercolour painting by Oswald Brierly- PXD 81 Folio 7 courtesy of the Mitchell Library, Sydney, NSW)

The vessel was jointly owned by Thomas Ayerst and Gordon Sandeman from January 1842 until July 1842. Clarence was first registered (Sydney No 6 of 1842) as a wooden two-masted carvel-built schooner of 67 and 498/3500 tons and described as having a square stern, standing bowsprit, no galleries and one deck. Joseph Thomson was her master from 24 January 1842  until 7 October 1842.

There are no records of Clarence’s voyages before 1845.  Port Albert was to be her only destination for the duration of 1845 and well into 1846, for between 22 July 1845 and 11 May 1846 she only made 10 round trips to Hobart and Port Phillip Bay, mostly carrying passengers and general cargo.  The vessel was used in the trade of timber, cattle, sheep,  and other cargo between Sydney, Melbourne, Hobart, and Geelong until it was stranded and nearly wrecked in Warrnambool in 1847. The stranding at Warrnambool at the time brought about allegations of insurance fraud.  An investigation was launched, though documents on whether these accusations were proven have not been located.

After repair, of which there is some indication that it was refitted to accommodate passengers, as that was her main source of income in 1848.  A female bust figurehead was added sometime during the period between 1842 and 1850, possibly after the vessel was stranded at Warrnambool in September 1847.  In 1848, Clarence was again used as a cargo vessel in Bass Strait trade, sailing between Port Fairy, Port Philip, and Launceston. 

On 2 September 1850, Clarence ran aground on a sand bank in Port Philip Bay while transporting 132 sheep from Melbourne to Hobart.  It had anchored in Coles Channel for the night, when the cable broke after a southwest to south southwest wind blew up. The sheep on board were rescued by Geelong residents, who would later enter into a dispute with the ship’s owners.  The result of the dispute is unknown. The loss of the vessel and cargo was estimated at £500.