On 20 March 1873 the Atlantic departed on her 19th voyage from Liverpool with 952 people onboard, of whom 835 were passengers. En route, the crew decided to make port at Halifax, Nova Scotia to replenish coal for the boilers.
During the approach to Halifax on the evening of March 31 the captain and 3rd officer were on the bridge until midnight, while the Atlantic made her way through a storm, proceeding at 12 knots (22 km/h) for the entrance of Halifax harbour, experiencing intermittent visibility and heavy seas. Unbeknownst to the crew or passengers, the Atlantic was approximately 12½ miles (20 km) off-course to the west of Halifax Harbour. Officers failed to take soundings, post a masthead lookout, reduce speed or wake the captain as they near the unfamiliar coast. They somehow did not spot the Sambro Lighthouse, the large landfall lighthouse which warns mariners of the rocky shoals to the west of the harbour entrance.
At 2:00 a.m. local time on 1 April 1873, the Atlantic struck an underwater rock called Marr's Head 50 metres from Meagher's Island, Nova Scotia. Lifeboats were lowered by the crew but were all washed away or smashed as the ship quickly filled with water and flipped on its side. Survivors were forced to swim or climb ropes first to a wave-swept rock and then to a barren shore. Residents of the tiny fishing village of Lower Prospect and Terrence Bay soon arrived to rescue and shelter the survivors but 535 people died, leaving only 371 survivors.. The ship's manifest indicates that of the 952 aboard, 156 were women and 189 were children on board (including two who had been born during the voyage). All women and all children perished except for one ten-year-old boy, John Hindley. Ten crew members were lost, while 131 survived. This was the worst civilian loss of life in the Northern Atlantic until the wreck of Norge on Rockall on 28 June 1904. The Canadian government inquiry concluded with the statement, "the conduct of Captain Williams in the management of his ship during the twelve or fourteen hours preceding the disaster, was so gravely at variance with what ought to have been the conduct of a man placed in his responsible position".
On March 31st captain Williams and third officer C. L. Brady were at the bridge till midnight, there was heavy seas and it was very dark. At 2 o'clock in the night on April 1st, the ship struck an underwater rock. Quartermaster Reynalds, had just prior to this logged a true speed of 12 knots. The officers and crew immediately rushed on deck, and tried to get the 10 lifeboats out by chopping the ropes with axes, but the lifeboats were washed away, as the ship was sinking and the seas washed over the deck. 20 persons were killed on the deck when the bow on the foremast came loose and turned.
There have been many romantic incidents attending this calamity which have come to light during the search for the bodies. One was the discovery of a girl in sailor's garb, whose life was sacrificed in efforts to save others. She was about twenty or twenty-five years old, had served as a common sailor for three voyages, and her sex was never known until the body was washed ashore and pre pared for burial. She is described as having been a great favorite with all her shipmates, and one of the crew, speaking of her, remarked: "I didn't know Bill was a woman. He used to take his grog as regular as any of us, and was always begging or stealing tobacco. He was a good fellow, though, and I am sorry he was a woman." It is said that the poor thing was an American, and, among the crew, perhaps the only one of that nationality. Who she was and whence she came nobody knew.
The hundreds of survivors were soon taken to the nearby village of Lower Prospect to be looked after until steamers came from Halifax. One group of survivors, not wanting to burden their rescuers, set out and walked all the way to Halifax. Despite the efforts of the crew and the citizens of the tiny village, 562 of the 933 people lost their lives. Most were buried in mass graves at the Anglican and Catholic cemeteries in Lower Prospect. A monument to the victims is located at the SS Atlantic Heritage Park beside the Anglican cemetery in Terence Bay, 32 km. from Halifax.