Catawba was launched 13 April 1864 by Alexander Swift and Co., Cincinnati, Ohio and accepted by the United States Navy on 7 June 1865 and placed in ordinary at Mound City, Illinois until early in 1868 when she was resold to her builders. Alexander Swift and Co. put the Catawba up for sale to any country interested in buying her. The Peruvian government acquired her on 2 April 1868 for a price of US$400,000. Though the selling of the Catawba and her sister the Oneota was disputed because of a potential treaty violation between the United States and Spain following the Chincha Islands War between Spain and Peru, the sale was allowed to proceed. Alexander Swift and Co. had to pay fines that equaled nearly ⅓ of the total sale amount and the vessels were moved to New Orleans, to await their new crews.
She was renamed Atahualpa, after the Emperor Atahualpa, the last ruler of the Inca Empire. A few months later, Captain Juan Guillermo More brought a Peruvian Navy crew to the United States to bring the ship to Peru. The monitor sailed from New Orleans in early January 1869 arriving in Peru in June 1870.
The Atahualpa deteriorated quickly in the Pacific. When the War of the Pacific with Chile was declared in 1879, she was in very poor condition. In May 1879, the Atahualpa was to sail from Callao to Arica. However, her engines broke down and the monitor had to be towed back to Callao, were she remained.
On 11 December 1880, the Chilean fleet staged off Callao and started firing at the port at ranges of up to 6.5 kilometres (4.0 mi). The Atahualpa, escorted by a tug, carried out a long range battle with the Chilean fleet. On 16 January 1881, her crew was forced to scuttle the Atahualpa to prevent her capture by advancing Chilean forces. The Atahualpa was raised that same year, used as hulk, finally discarded around 1910 and presumably scrapped.
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