This is an excerpt from Farewell Old Mount Washington by Edward H. Blackstone describing what happened after the launching of the Mt. Washington II,
which was from Lakeport on August 12, 1940.
The 1940 season has been a very short one, which had not paid for very much of the new vessel's cost, and by 1941 with World War II going on in Europe, costs were rising, items like fuel oil and other needed supplies were restricted, and travel was limited. Therefore income was inadequate, and with the entry of the United States into the war there was no alternative for the new steamboat company except to go into bankruptcy, which it did in April 1942. After bankruptcy the steam engines were commandeered for war service by the U.S. Coast Guard and Mt. Washington II was laid up for the duration of the war. Captain Leander Lavallee died before the war was over, and with him died an era of Lake Winnipesaukee Steamboating.
It seems to me that we are very lucky that only the engines were commandeered. Wasn't our country melting down all the steel they could find for the war effort?