The Incredible Story of the Largest Wealth Transfer in History

At 7:35 A.M. on July 1st, 1940, a ship arrived in the port of Halifax, carrying a shipment of fish. Under the watchful eye of 300 armed policemen, the cargo, packed in hundreds of wooden crates, was methodically checked and rechecked before being loaded onto a dozen railcars. From Halifax, the shipment made its way to Montreal, where the train was relieved of around half its load before carrying on to the Canadian capital of Ottawa. Here, the remaining crates were offloaded and transported to the Bank of Canada, where they were locked deep underground in a concrete vault and kept under 24 hour guard. As you might have surmised, this was no ordinary delivery of seafood. For the ship that docked in Halifax that day was not a regular old fishing trawler or cargo steamer but the 9,000-ton British cruiser HMS Emerald, while the crates it carried held not fish but some £58 million in gold bullion and securities certificates – nearly 2% of Great Britain’s total monetary reserves. Over the following months some £2.5 billion would make the trip across the Atlantic in a desperate bid to save Britain’s assets in the event of Nazi invasion. This is the incredible story of Operation Fish, the greatest transfer of physical wealth in modern history.

In June 1940, Britain stood on the edge of an abyss. France had just fallen to the Nazis, and 338,000 men of the British Expeditionary Force evacuated from the beaches of Dunkirk, leaving most of their weapons and equipment behind. A German invasion of the British Isles appeared imminent. In the event the unthinkable occurred, the government of newly-elected Prime Minister Winston Churchill planned to evacuate to Canada and run what was left of the Empire from Montreal. First, however, the government set about transferring all its monetary assets overseas for safekeeping – including its vast gold reserves. These reserves were key to Britain’s ability to continue fighting the war. At the time, the United States, which supplied Britain with most of her food, raw materials, and weapons, was still officially neutral, meaning it could not extend credit for the purchase of war materiel. All transactions were strictly cash-and-carry. Meanwhile, Adolf Hitler had good reason to covet Britain’s gold reserves. Being poor in nearly every natural resource except coal, in the interwar years Germany had been unable to accumulate large stocks of gold or hard currency, and was thus forced to plunder the nations it conquered in order to fuel its ongoing war of expansion.

The transfer of British wealth overseas had actually already begun several years earlier, as the storm clouds of war began gathering on the horizon. Starting in early 1936, the Bank of England began purchasing Canadian gold and storing it in earmarked accounts at the Bank of Canada. This not only provided a convenient and safe emergency reserve in case of war, but the Bank of Canada sold gold at a globally competitive rate and charged almost nothing for processing and storage, while storing gold in Canada allowed for much easier exchanges with the United States Federal Reserve. By the end of 1937, the Bank of England had accumulated 4,748 gold bars in its Ottawa account, worth a total of $66 million USD.

But it was not until 1939, when war became all but inevitable, that the transfer of British wealth to Canada truly began in earnest. In order to keep the first shipment secret, the British government hit upon the perfect cover: the upcoming royal visit of King George VI and Queen Elizabeth to Canada. On May 6, 1939, the Royal Couple set sail from Portsmouth aboard the Canadian Pacific ocean liner Empress of Australia. Escorting them across the Atlantic were the cruisers HMS Glasgow and HMS Southampton and the battleship HMS Repulse, each carrying a secret cargo of £10 million in gold bars. When, halfway through the crossing, King George decided that Repulse was more urgently needed for the defence of the British Isles, its gold was redistributed between the remaining two ships and Repulse returned home – and for more on the ultimate fate of HMS Repulse, please check out our previous video Force Z and the Death of the Battleship.

On May 16, as massive crowds choked the docks and streets of Quebec City to greet Canada’s royal guests, a team of workmen, police guards, and Bank of Canada employees worked quickly and quietly to count the gold and unload it from the warships for transport via train and truck to the Bank of Canada vault in Ottawa. The whole process of accounting, transport, and storage took two weeks and hundreds of personnel, yet the Canadian government managed to keep the whole operation secret from the public. It was an encouraging sign of things to come.

On September 3, 1939, Britain declared war on Nazi Germany. One month later, on October 7, a convoy consisting of the light cruisers HMS Emerald, Enterprise, and Caradoc and the battleships HMS Revenge and Resolution, set sail from Plymouth loaded with £2 million in gold bars, in the first of many wartime gold runs collectively codenamed Operation Fish. By now, however, shipping millions in gold bullion to Canada was a significantly riskier prospect, for German U-boats now prowled the North Atlantic. The British were acutely aware of the risk; on January 25, 1917 the ocean liner SS Laurentic was sunk by German mines off the coast of Ireland, carrying 43 tons of gold to the bottom. While most of Laurentic’s cargo was eventually recovered, any gold lost in the mid-Atlantic would be lost forever. And with Britain’s economy just recovering from the depths of the Great Depression, the loss of even a single shipment would have been disastrous to the nation’s war effort. Furthermore, the War Cabinet had decided not to inform the War Risk Insurance Office of the shipments, reasoning that nobody would consider insuring such an absurd amount of wealth anyway. The convoy’s mission was thus carried out under the strictest of secrecy, the ships’ crews even being outfitted in tropical white uniforms to confuse German intelligence as to the nature of their voyage. But the convoy’s greatest foe during the crossing would not be U-boats but the North Atlantic itself, with Emerald and her escorts encountering the heaviest seas any of their captains had ever encountered. By the time the convoy reached Halifax, Emerald had lost her ship’s boats, rafts, depth charges, spotter aircraft, and various other fittings and equipment. But once again the gold safely reached its destination, and was quietly and efficiently whisked away to the Bank of Canada vaults in Ottawa.

More shipments would follow, though this time they would carry more than just gold. At the outbreak of war, the British government had forced its citizens to register all securities – such as stocks and bonds – with the Bank of England. In the summer of 1940, when Winston Churchill came to power and a Nazi invasion appeared imminent, the Government confiscated these securities and secretly transported certificates to Greenock in Scotland. Here some £200 million in certificates and £30 million in gold was loaded aboard the dependable HMS Emerald, which set sail once more for Canada on June 24, 1940. By this time the Battle of the Atlantic had reached its peak, with German U-boats sinking over 100 ships – nearly 40% of all transatlantic traffic – in May 1940 alone. And just like on the first voyage, Emerald and her destroyer escorts encountered heavy seas, thick fog, and treacherous sea ice. Two destroyers were forced to turn back, while for several Emerald was forced to come to a complete stop, making her a sitting duck for prowling submarines. Miraculously, however, the convoy once again made the 4,600 kilometre crossing unscathed, arriving in Halifax harbour on the morning of July 1.

At Pier 6, officials from the Bank of Canada and Canadian National Express were waiting to greet the shipment, and under the watchful eye of armed Royal Canadian Mounted Police, they supervised its transfer to a waiting train. Twelve specially-reinforced rail cars had to be used, as the floors of regular passenger coaches could not handle the weight of the gold. Sydney Perkins, an employee of the Bank of Canada’s Foreign Exchange Control Board, would later describe the scene:

“Seeing tens of millions in gold piled on the quay gave me a cold chill. Even with the whole area fenced off, some word about this enormous shipment could easily leak out in a big port like Halifax.”

Yet once again the whole operation was carried out in complete secrecy, and within hours the sealed train and its precious cargo were on their way to Montreal, protected by nearly 300 armed guards. At Montreal’s Bonaventure Station, the accompanying team of five exhausted Bank of England officials, lead by Alexander Craig, were greeted by David Mansur, Acting Secretary of the Bank of Canada. As the two men shook hands, Craig uttered the cryptic – and very British – code phrase:

“Hope you won’t mind our dropping in unexpectedly like this, but we’ve brought along quite a large shipment of fish.”

The two men then set about arranging the division of the cargo. The securities certificates were unloaded in Montreal and transported by truck to the Sun Life Assurance Building – then the largest office building in the British Empire. At first the boxes of securities were piled in a large space known as the buttress room, but it soon became clear that a more secure repository would be needed. Chronic wartime shortages, however, meant that the steel needed to construct a vault was hard to come by. A solution was soon found in the form of 870 steel rails ripped up from an abandoned railroad and a massive vault door borrowed from the Bank of Canada. In July 1940, workmen began pumping 360 tons of concrete into the basement of the Sun Life Building to create a steel-reinforced vault 15 metres below street level with walls one metre thick. Completed in six weeks, the vault was crammed with over nine hundred four-drawer filing cabinets filled with securities, protected by an acoustic alarm system so sensitive it could detect the sound of a drawer opening, as well as 24 RCMP guards barracked in the building. As Officer Bill Ritchie later recalled:

“On arrival, two members each were stationed at the first and second basement floors at the elevators, while the majority were in the third basement, doing shift duties. We witnessed the arrival of numerous boxes being brought to the third basement while the vault was being constructed, with us standing guard. Still, we did not know officially what they contained. We made $1.50 a day and really had a lot of fun. We were a very cohesive group and we bonded a lot during that month and a half, but in the end we were happy to return home.”

To protect the secrecy of the operation, the vault construction was explained away as an emergency measure to reinforce the Sun Life Building’s foundations, while a rumour was intentionally spread in Montreal that the British Crown Jewels were being stored in the building to justify the extra security.
To help manage the storage and exchange of certificates, David Mansur hired a team of 120 retired bankers, brokers, and investment secretaries. Yet despite this increased activity, none of Sun Life Insurance’s 5,000 employees ever learned or suspected what was being stored in their new underground vault – nor, for that matter, did the Canadian public.

Meanwhile, HMS Emerald’s shipment of gold bullion carried on to Ottawa, where it was transferred by armoured trucks and labourers working 12-hour shifts into the Bank of Canada’s 60-by-100-foot underground vault on Wellington Street.

The £230 million shipment set a world record for the largest amount of physical wealth ever transferred – as did Canadian National Express’s $1 million fee for transporting it. But even this amount would be dwarfed by subsequent Operation Fish shipments. On July 5, 1940, a convoy comprising the ocean liners SS Monarch of Bermuda, SS Sobieski, and SS Batory, escorted by the British warships HMS Revenge and HMS Bonaventure set sail from England carrying £400 million in gold and foreign securities. The voyage was fraught with difficulties. Halfway through the crossing, Batory was beset by engine problems and was forced to drop out of the convoy, escorted only by Bonaventure. The two ships then encountered thick fog and were forced to stop, making them highly vulnerable to attack. Eventually, however, the Batory managed to repair her engines and the shipment safely reached Halifax several days later. More shipments followed, with SS Antonia and SS Duchess of Liverpool making the crossing carrying £10 million each and HMS Furious delivering £20 million. The largest shipment of wealth aboard a single ship, however, came courtesy of the Bank of France, which, like Britain, had begun transferring its gold reserves overseas at the outbreak of war in 1939. In June 1940, France sent 254 tons of bullion worth £75 million to Halifax aboard the cruiser Émile Bertin, among the fastest warships in the world at the time. The Bank of Canada had previously received several shipments of French gold without incident, but the changing political situation would complicate this particular delivery. With France now occupied by the Nazis, the British government requested that all French assets in foreign banks be made available to aid the Allied war effort. The captain of the Émile Bertin, however, remained loyal to the new collaborationist Vichy government and defied British orders by slipping out of Halifax harbour and sailing to the French Caribbean colony of Martinique. In response, Britain pressured the Bank of Canada to release all its French assets to the Allied cause. Canada, however, saw such a move as a violation of its role as an impartial banker, and after months of debate decided to freeze France’s assets until the end of the war, declaring:

“The time has come for Canada to distance itself from Britain’s international agenda [and] cease acting out of colonial obedience.”

By the time Operation Fish ended in late 1940, some £2.5 billion in assets from Britain, France, Norway, Belgium, the Netherlands, and other allied nations had been shipped across the Atlantic and placed in Canadian vaults – the largest transfer of physical wealth in modern history. This wealth included some 1,500 tons of gold bars and coins worth nearly £470 million – an amount so vast that the Bank of Canada ran out of vault space to store it all. According to historian James Powell:

“The story that I have heard is that there was so much gold coming in at one point, they were just stuffing it everywhere, in hallways, in the incinerator room, just stuffing it to keep it safe before the accountants could come and look at all the boxes and tally it all up to make sure it was all there.”

Indeed, it is estimated that by the end of the war, the amount of gold stored in the Bank of Canada’s vaults was exceeded only by the United States gold reserve at Fort Knox. But perhaps the most remarkable fact about Operation Fish is that despite the U-boat menace and the hundreds of bankers, clerks, workmen, guards and other personnel involved in the operation, not a single ship was sunk nor a single bar or gold or security certificate misplaced. Nor did German intelligence or even the Canadian public ever find out about the massive transfer of wealth. Indeed, so tightly was secrecy maintained that the Maritime Command Museum in Halifax has been unable to find any official records of any gold-related activities at any of the city’s piers during the war. Even the service records of the destroyer HMCS Assiniboine are devoid of any mentions of gold, even though British records indicate that it carried £1 million in bullion from Plymouth to Halifax in November 1939.

However, by the time Operation Fish was concluded, Germany had completely abandoned its planned invasion of Britain, rendering the original purpose of the operation somewhat moot. Furthermore, on March 11, 1941 the United States further distanced itself from its pretense of neutrality by passing the Act to Promote the Defense of the United States, more commonly known as the Lend-Lease Act. This allowed the United States to loan Britain tanks, aircraft, ships, and other weapons for cheap or free, on the condition that it was returned at the end of the war. On December 8, 1941, the United States declared war against the Axis Powers, finally allowing it to freely supply Britain with arms.

Yet Operation Fish had not been for nothing. Storing her gold reserves close to the United States made it far more convenient for Britain to purchase arms and other war materiel, while the massive influx of foreign gold and securities gave the Bank of Canada the boost it needed to become a powerhouse in global banking. Indeed, after the war all the nations which had deposited assets in Canadian banks chose to keep their accounts active, with many even increasing their deposits in order to take advantage of Canada’s competitive banking fees and exchange rates. In a sense, Operation Fish epitomizes the doctrine of Total War, in which all of a nation’s resources and productive capacities – no matter how obscure – are committed toward prosecuting the conflict. As the Canadian historian Tim Cook writes:

“Operation Fish is a testament to the quiet professionalism of the men and women involved. [It] is a story of tremendous courage on the part of many, of bureaucratic planning … the stuff that doesn’t usually get written about in histories, but really one of those key events that allows Britain to keep fighting.”

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