Operation Fish: How Britain, Facing Invasion, Moved Its Gold and Securities to Canada

Late in the afternoon of July 2, 1940, a train from Halifax pulled into Bonaventure Station in Montreal. Stepping off it were Alexander Craig and his party from the Bank of England. Waiting on the platform were two Bank of Canada men, David Mansur and Sidney Perkins, and Craig greeted them with a puzzling line: “Hope you won’t mind our dropping in unexpectedly like this, but we’ve brought along quite a large shipment of fish.” The train was not carrying fish. It held 2,229 boxes of gold bars, worth £30 million, and 500 boxes of securities valued at £200 million (Canada’s History). This was the first large shipment of Operation Fish, in which Britain, facing a German invasion, secretly moved the nation’s gold and overseas securities to Canada.

This article walks through why Britain trusted Canada with its wealth, how the ships crossed an Atlantic full of U-boats, and where the gold and securities were hidden and what they were used for once they arrived.

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Why Canada? Gold Stockpiled Since 1936

Canada was not a last-minute choice. It had founded its central bank, the Bank of Canada, only in 1935, and Montagu Norman, who had led the Bank of England since 1920, developed an unusually close relationship with the Bank of Canada’s young governor, Graham Towers. From early 1936 Britain held an “earmarked gold” account in Canada and began buying and storing gold there. By the end of that year the Ottawa account held 3,304 gold bars, and a year later the number had grown to 4,748. The two central banks trusted each other, the Royal Canadian Mint supplied gold at an attractive price, and Ottawa was close to the Federal Reserve Bank of New York, where the Bank of England did frequent business (Canada’s History). The Bank of Canada Museum explains that after the 1938 Munich Agreement the Bank of England increased its gold in Canada as a precaution (Bank of Canada Museum).

In early 1939 Britain quietly asked the Bank of Canada whether it would receive gold shipped from Britain if war broke out. The purpose was clear. With gold in Canada, Britain could still pay cash if it had to buy weapons from the United States (Canada’s History). The first big shipment used the May 1939 visit of King George VI and Queen Elizabeth to Canada as cover. The plan was to load £10 million on each of the three warships escorting the king, but when the battle cruiser Repulse was ordered to go only halfway across the Atlantic, the gold was divided between the other two ships (Canada’s History). The Historical Society of Ottawa names these two ships as the cruisers Southampton and Glasgow and puts their cargo at about 50 tons of gold, then worth £14 million. Sources give different figures for this shipment (Historical Society of Ottawa).

When Britain and France declared war on Germany on September 3, 1939, the gold began to cross in earnest. That same month the British government required citizens to register the securities they held with the Treasury (Wikipedia). On October 7, the light cruiser Emerald under Captain Augustus Agar left Plymouth with Enterprise, Caradoc and the battleships Revenge and Resolution. Each ship carried £2 million in gold bars. The crews were issued white tropical uniforms to confuse German spies, and Emerald lost her lifeboats and even her scout plane in a violent storm before reaching Halifax (Wikipedia, Canada’s History).

Summer 1940: Sending Everything That Was Left

Between late May and early June 1940, more than 300,000 British and French troops barely escaped from Dunkirk, but they left most of their weapons behind. On June 14 German troops entered Paris, and Italy had entered the war on Germany’s side. An invasion of Britain had become a real threat (Historical Society of Ottawa). The government of Winston Churchill, who had become prime minister on May 10, decided to send overseas not only the remaining gold but also the foreign securities that citizens had registered. The government requisitioned these securities under the Emergency Powers Act (Bank of Canada Museum, Wikipedia). According to the Bank of Canada Museum, Churchill even planned to move the government to Montreal and lead the Commonwealth from there, and the Bank of England prepared to set up a “shadow bank” in Ottawa (Bank of Canada Museum).

As the danger grew, the limits on how much a single ship could carry were dropped. Warships and merchant ships were loaded with boxes of gold bars and bags of gold coins, often to the point of damaging the ships’ structure (Canada’s History). In early June the battleship Revenge carried £40 million in gold to Halifax, and two passenger liners sailing with her carried £10 million each (Canada’s History, Historical Society of Ottawa). Britain’s War Cabinet did not even inform the War Risk Insurance Office of these shipments, reasoning that if a ship sank, the loss could never be compensated anyway (Canada’s History).

The Voyage of the Emerald, and the “Fish”

In mid-June Governor Norman called in Craig and other Bank of England staff and asked whether they were willing to take on a top-secret mission. The job was to move Britain’s wealth safely to Canada, and the mission already had a code name: Operation Fish (Historical Society of Ottawa). On June 24 the Emerald left Greenock in Scotland (Wikipedia). Her captain was now Francis Flynn. She carried £30 million in gold and £200 million in securities. The gold went into the ammunition magazines, and the boxes of securities filled every corner of the ship. Even the floor of the captain’s day cabin was covered with boxes, and Craig slept on top of them. The storm was so fierce that the two destroyers escorting her turned back to Britain, and the Emerald raced on alone at full speed (Historical Society of Ottawa). After crossing about 4,600 km, she reached Halifax on the morning of July 1 (Bank of Canada Museum).

The docks were sealed off, and the cargo was moved under armed guard onto a train that left for Montreal that night (Historical Society of Ottawa). The “fish” Craig mentioned at Bonaventure Station the next day was this cargo. The greeting is often said to be where the operation got its name, but according to the Historical Society of Ottawa, Craig’s party knew the code name before they set out. It is more natural to read the greeting as a joke playing on the code name. In Montreal the train was split in two. The cars carrying gold went on to Ottawa, and the cars carrying securities were held on a remote siding. In the early morning the boxes of securities were trucked through streets closed to traffic to the Sun Life Building (Historical Society of Ottawa, Canada’s History).

A Five-Ship Convoy: £192 Million in Gold

The Emerald’s shipment was soon overshadowed by a bigger one. The convoy that left Scotland in early July was made up of the battleship Revenge, the cruiser Bonaventure, and three converted liners serving as transports, the Monarch of Bermuda, the Sobieski and the Batory. The gold and securities aboard the five ships were conservatively estimated at £450 million, of which £192 million was gold (Historical Society of Ottawa, Canada’s History). The Monarch of Bermuda also carried families being evacuated to Canada (Historical Society of Ottawa).

Once again the sea was not kind. The Polish liner Batory fell out of formation with engine trouble, leaving her with only the Bonaventure as escort, and thick fog and the danger of icebergs forced the ships to stop at sea for a while (Wikipedia). The Historical Society of Ottawa writes that the Batory took shelter in St. John’s, Newfoundland. Perkins, who received the cargo in Halifax, later recalled: “Seeing tens of millions in gold piled on the quay gave me a cold chill” (Canada’s History). To speed up the unloading, he had a slide built from discarded steel plates so that the gold boxes could slide from the deck down to the quay. Many of the boxes and coin bags had been damaged on the way (Historical Society of Ottawa).

Moving this gold alone took five special trains, because the floor of each coach could carry only 150 to 200 boxes. The gold traveled uninsured, and the freight charge paid to the express service of Canadian National Railways reportedly came to more than a million dollars (Canada’s History).

A Sea Full of U-boats

The numbers show how dangerous these voyages were. In May 1940 alone, 100 Allied and neutral merchant ships were sunk in the North Atlantic (Historical Society of Ottawa, Bank of Canada Museum). There was also the memory of the previous war. In 1917 the liner Laurentic, carrying about 43 tons of gold, struck two German mines off the north coast of Ireland and sank. The crew got away in lifeboats, but 354 people died of hypothermia. Most of the 3,211 gold bars were recovered by 1924, but 22 were never found (Wikipedia).

Even so, not a single ship carrying gold in Operation Fish was lost (Canada’s History, Bank of Canada Museum). The Historical Society of Ottawa does, however, point to one exception among the dozens of ships that moved British wealth during this period. On June 19, 1940, the liner Niagara left Auckland, New Zealand, and sank after striking a mine laid by a German auxiliary cruiser. She was carrying 590 British-owned gold bars (about £2.5 million) being sent to the United States to pay for war supplies, and a 1941 salvage operation recovered 555 of them (Maritime New Zealand, Historical Society of Ottawa). This happened on a Pacific route, not in the Atlantic.

A Secret Vault Beneath Montreal

The Sun Life Building, where the securities were headed, was then the largest commercial building in the Commonwealth. The boxes of securities that arrived in the early hours of July 3 were first carried down, under the watch of armed police, to a temporary storeroom known as the Buttress Room. The real vault had to be built from scratch in the third basement, about 15 m below the street. Because steel was scarce, 870 rails pulled up from an abandoned railway were used, and the vault door was borrowed from the Royal Bank of Canada. Two compressors set up in the street blew 360,000 kg of sand, cement, stone and water into the basement, and curious passers-by were told that the building’s structure was being reinforced. The vault was finished on July 28 (Canada’s History).

Inside steel-reinforced concrete walls about 90 cm (3 feet) thick, 900 four-drawer filing cabinets were packed with securities. An alarm system was installed that would record even the sliding of a single drawer. Guard duty is said to have been handled night and day by 24 men of the Royal Canadian Mounted Police (RCMP) who ate and slept in the building. They were members of the Musical Ride, the RCMP’s riding display team, and were paid $1.50 a day. Canada’s History, however, thinks it more likely that these men guarded the temporary storeroom during the roughly six weeks it took to build the vault (Canada’s History).

Once the vault was ready, Craig hired about 120 people, including retired bankers and stockbrokers, and quietly opened the United Kingdom Security Deposit (Canada’s History, Bank of Canada Museum). The Historical Society of Ottawa puts the staff at 130 and says all of them swore an oath of secrecy. The roughly 5,000 Sun Life employees never knew what lay beneath their feet. To explain the extra people going in and out of the building, a rumor was deliberately spread that the British crown jewels were hidden there (Wikipedia, Historical Society of Ottawa).

The Vault in Ottawa: More Gold Than Anywhere but Fort Knox

The gold went to the head office of the Bank of Canada on Wellington Street in Ottawa. The boxes arrived so fast that there was not enough room for them. Boxes waiting to be processed were stacked in the basement corridors and even in the incinerator room where worn-out banknotes were burned, and staff worked 12-hour shifts unpacking the gold bars and coin bags, placing them in a vault about 18 m by 30 m (60 by 100 feet) and recording each one. By the end of the operation, the Bank of Canada was holding more gold than anywhere except Fort Knox in the United States (Historical Society of Ottawa, Bank of Canada Museum).

The overall scale depends on what is being counted. The Historical Society of Ottawa writes that the gold moved from the Bank of England to Ottawa came to more than £470 million (about US$67 billion in 2014 dollars), and that the securities in the Sun Life vault were then estimated at £1.25 billion. The Bank of Canada Museum explains that the plan as a whole, including the Bank of France’s share, involved almost 2,000 tons of gold bars and coins, that more than 1,500 tons of gold went into the Bank of Canada’s vault, and that the wealth moved from Britain to Canada was worth about $160 billion in 2017 dollars. The museum does not say whether these are Canadian or U.S. dollars (Bank of Canada Museum). According to Canada’s History, the gold the Bank of Canada received between 1938 and 1945 amounted to 186,332 gold bars and more than 8 million ounces of gold coins. This figure, however, includes gold deposited by other countries such as Norway, Belgium and the Netherlands, so it is not Britain’s share alone (Canada’s History).

Who Ran the Operation?

Operation Fish is often linked with Churchill’s name. Under the threat of invasion, Churchill’s government decided to send everything that was left and dropped the limits on how much each ship could carry (Historical Society of Ottawa). But gold had begun to pile up in Canada four years before Churchill became prime minister. The actual work was done by bankers and sailors. At the Bank of England, Governor Norman assigned the mission and Craig led it on the ground. On the Canadian side, Mansur and Perkins, under Governor Towers, received the cargo and set up the depository. At sea, the crossings were made by the Emerald (under Captain Agar in 1939 and Captain Flynn in 1940) and by the convoy led by Admiral Ernest Archer (Canada’s History, Historical Society of Ottawa, Wikipedia).

A Different Route for France’s Gold: The Émile Bertin

Britain was not the only country sending gold to Canada. The Bank of France was sending gold too. In June 1940 the fast French cruiser Émile Bertin arrived in Halifax with 254 tons of gold, worth $305 million by the Bank of Canada’s estimate (Canada’s History). The Émile Bertin was in Halifax after her second crossing as France was concluding an armistice with Germany (signed June 22, 1940). When her captain, Battet, asked the French Admiralty for instructions, he was ordered to take the gold to Fort-de-France on Martinique in the Caribbean (Wikipedia). Britain told him to unload the gold in Halifax and send it on to Ottawa, but the captain followed the instructions of the naval command of Pétain’s government, which had chosen the armistice (later the Vichy government), and slipped out of Halifax. Churchill, worried that stopping the ship by force would make Britain look like an aggressor in American eyes, had no choice but to let her go (Canada’s History).

A tug-of-war also broke out over the 10,581 French gold bars already in Ottawa. Britain tried to persuade Canada to use this gold for the Allied cause, but after months of debate Canada decided to freeze it until the end of the war (Canada’s History). Canada chose to act as an impartial banker and protect the gold entrusted to it.

What Were the Gold and Securities Used For?

Part of the reason for the urgency lay in American law. The 1939 Neutrality Act required countries at war to pay cash for American weapons and carry them away themselves (cash and carry), and the 1934 Johnson Act barred loans to countries that had not repaid their First World War debts, Britain among them (U.S. Office of the Historian). In December 1940 Churchill told Roosevelt that Britain could no longer pay, and that month Roosevelt proposed Lend-Lease, which took effect the following year (U.S. Office of the Historian). Until then, the gold and securities stored in Canada were Britain’s wallet.

Over the following years the securities in Montreal were sold on the New York Stock Exchange and elsewhere to pay for the war (Wikipedia). How much of the holdings was sold, however, remains unknown. After the war the remaining securities, much reduced, were shipped back to Britain aboard the cruiser Leander. After the war, the countries with gold accounts in Ottawa were in no hurry to empty them; the accounts stayed open, and several countries actually increased their deposits (Canada’s History).

“The Largest in History” and a Secret That Held

Operation Fish is often described as “the largest movement of physical wealth in history” (Bank of Canada Museum, Wikipedia). The sources, however, do not make clear what it is being compared with. Even without that label, some facts remain. More than 600 people were involved (Bank of Canada Museum), yet the secret did not leak until the war was over, and not a line about it appeared in Canadian newspapers (Historical Society of Ottawa). The Canadians who took part received no medals and no official recognition (Canada’s History). A country moved its gold and securities across a sea patrolled by enemy submarines and kept the fact hidden to the end. That is the story behind the ordinary name “Fish.”

References

• Robert Low, “Operation Fish” (Bank of Canada Museum, 2018)
• “Guarding the Gold” (Canada’s History; first published in The Beaver, October-November 2000)
• James Powell, “Operation Fish” (Historical Society of Ottawa)
• Operation Fish (Wikipedia)
• French cruiser Émile Bertin (Wikipedia)
• SS Laurentic (1908) (Wikipedia)
• The RMS Niagara (Maritime New Zealand)
• Lend-Lease and Military Aid to the Allies in the Early Years of World War II (U.S. Department of State, Office of the Historian)

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