This pearling lugger was built as Mercia in 1907 for Hodels Ltd, a Thursday Island pearling company. It is a Thursday Island style of pearling lugger, built there by Japanese boatbuilder Tsugitaro Furuta, one of the more prolific lugger builders of that time. Furuta is believed to have come from the Wakayama Prefecture, near Osaka, , the birthplace of most of the Japanese who came to Thursday Island in the early 20th century to work in the local pearling industry. The British Register of Ships shows that Furuta built at least 41 luggers between 1899 and 1930, one of the earliest being Mina which is now Tribal Warrior and the oldest extant lugger. The proprietor of Hodels Ltd was Frederick Charles Hodels. In his evidence to the 1908 Royal Commission into the Pearl Shelling Industry he stated that he owned two pump boats and two bêche-de-mer boats, indicating he was one of the many small operators in the Thursday Island pearling community. In February 1911 Hodels sold his business, including Mercia, to the Wyben Pearling Company Pty Ltd which in turn was owned by Burns, Philp & Co. Ltd.
The Wyben company operated Mercia for 30 years until it was requisitioned by the Commonwealth Government for military service. Correspondence held by the National Archives shows that the Australian Army had control of Mercia well before February 1943 when the shipping register entry was finally updated. In August 1942 Wyben was given notice to surrender all its luggers and Mercia was handed over soon afterwards. Initially the company tried to keep some of its luggers out of military control but they had all been handed over by 12 December 1942. In a list of that date Mercia appears as the fourth of 60 luggers impressed by the military in northern Australia, noting its value as £1250 minus £219 for repairs, leaving a net value of £1031. All the luggers pressed into military service underwent a conversion costing about £23/10/- each. Mercia’s conversion involved removing machinery and equipment associated with diving; stripping internal fittings, bunks, water tanks, etc.; removing ballast; lowering the cabin sole and increasing cargo space from 5–7 tons to 12–15 tons; making hatches and covers; surveying the hull; and undertaking general work on the rigging and windlass.
Following its conversion, it departed for Daru in the Torres Strait in December 1942, travelling via Badu to pick up a cargo of palm leaves. It continued to work in the Torres Strait and north to New Guinea. On 30 August 1945, straight after the war, Mercia was sold to Mr W.R. Albert xxx for £100. The shortage of boats in the post-war years and the high price of shell resulted in a concerted effort to round up all remaining boats and get them back into work. Many were still in New Guinea, having been sold 'as is where is' by the military. By 1946 Mercia was back at Thursday Island. In 1948 it was licensed to the Bowden Pearling Co. with the registration number A31. In 1957 a new engine was installed and the boat was re-registered and re-measured. It continued working for Bowdens until the company became bankrupt in 1961. Its pearling licence was suspended until the 1966–67 season when it returned under a new name, Penguin, given the new registration number A61 and licensed to the Aucher Pearling Shelling Company Pty Ltd.
In the 1970s Pengiun was again acquired by the Commonwealth Government and returned to a standard pearling vessel rig. It was placed with the Dauan Island community in Torres Strait for use as a service and supply vessel. In 1981, when it was replaced with a more modern vessel, the community agreed to hand it over to QMM on condition that it retain its Dauan Island colours and number.
The lugger has historic significance in documenting the pearling industry, one of northern Australia’s major industries of the late 19th and early 20th centuries. It is one of the few surviving pearling luggers to retain much of its original construction and layout, and the only Queensland-built lugger in a museum collection. It is also significant for its association with Japanese lugger builder Tsugitaro Furuta, one of Australia’s major lugger builders of the time; for its service during World War II; and finally for its service to the Dauan Island community.