The two masted schooner Louisa McDonald, official registry number 15872, was launched on may 22nd, 1869 with the primary purpose to carry freight such as shingles, lath and lumber. In 1876 a third mast was added. She was involved in an accident in 1880 and another in 1882. The McDonald's name was changed to Lily E. on June 1, 1883 and she was sold to M. Engelman from Manistee. She experianced problems while delivering lumber to the M.Engelman & Co. in Milwaukee when she missed the harbor entrance and struck the pier during a heavy northwest gale. Anchors were put out but she was still carried onto the beach. After days of difficult work she was pulled off and towed to the nearby dock. Again in November, 1883 she struck a pier during a gale and stranded on the beach. She was bought and sold a few more times over the following years and in 1912 she was laid up in the mud at the Sturgeon Bay boneyard for several years. In 1915 temporary repairs were made to the vessel by Leathem & Smith. She was then towed to Milwaukee where she was converted from a lumber schooner to a schooner of leisure where she spent her remaining time at the Milwaukee Yacht Club. During WWI cost of maintenance on the vessel was more than they could afford.
After serving seven years as the South Shore Yacht Club's floating headquarters, the old schooner Lily E. had sunk to the bottom and settled into the sand. The time had come for the decision to either burn her or send her to the bone yard. It was decided to abandon and burn the vessel in the midsummer of 1922. The vessel's former anchorage was filled in by the city, and in 1936 the South Shore Yacht Club was constructed on the fill. In 1976 a gate was built over the bow of the Lily E..
The Lily E. reportedly lies under the present gate to the South Shore Yacht Club.