The Niagara’s lost gold

Men will go to extraordinary lengths to recover sunken treasure from the depths of the sea. Salvaging that treasure can be a very dangerous occupation, but divers are always willing to expose themselves to the risks of deep water for the prize of a gold bar or two. Even with the use of modern diving bells – in which the salvager is sealed into a strong steel pod where the pressure of the depths cannot touch him – the endeavor is not without its dangers. This fact was illustrated very clearly in attempts to recover gold bullion from the sunken British liner the RMS Niagara.

Niagara (BLC)
The Royal mail ship Niagara, in New Zealand water at the outbreak of war.

At midnight on 18 June 1940 the Royal Mail steamer Niagara turned her bow out of Auckland’s Waitemata Harbour towards Suva, her first port of call en route to Canada. Captain Martin and Chief Officer Gibson had a number of things on their minds as the vessel turned north to transit the Hauraki Gulf. Their first concern was the large number of rocks and small islands dotting the waters of the Hauraki Gulf. Their other main concern was the cargo of gold they were carrying in a special strong-room, some eight tonnes of it. It had been loaded in Sydney and was on its way to America to pay for arms for the war currently raging in Europe. Only a few trusted officers on board were even aware of the gold beneath their feet.

The captain headed his ship towards the outer of the two channels leading north, passing the Hen and Chicken Islands and the Moko Hinau group to starboard, and leaving the Poor Knights Islands to port as he reached the open sea. The night was cold but windless and there was only a slight swell, good weather for the notoriously storm-lashed Hauraki Gulf in wintertime. When the two officers retired to their cabins for a few hours rest, they both felt confident that Third officer Beeby, who took over the watch, was capable of seeing them safely through to the open sea. They also had no reason to worry about the war, raging half a world away, at that time no New Zealand forces had been in action, although some had been sent to the Middle East. However, Captain Martin would not have fallen asleep so easily if he had known that during the previous weeks a German commerce-raider, the Orion, had penetrated the outer channel of the Hauraki Gulf and laid sea mines across its width. The raider must have been aided by the fact that New Zealand had not yet seen any necessity for a blackout, and all lighthouses and navigation lights were lit every night.

It came as a great shock when at 4 am in the morning the Niagara took a mine under number two hold. The captain was literally blown out of his bunk by the explosion, which also blew the forward funnel right off its mounting and over the side. Miraculously, no one was killed or badly injured. The Niagara, however, was doomed.

She took a slight list to port and began to sink at the bow. Martin ordered all boats swung out and lowered to the embarkation deck where the passengers were mustering. With the sea so calm, the abandon-ship drill went without a hitch and the boats, all the passengers and most of the 203 members of the crew got safely away. The captain and some key personnel stayed aboard for a while to send an SOS, and they hoped they might be able to beach the ship some 50 kilometers to the west. But hope was abandoned a mere hour later when the bow sank lower and the propellers rose out of the water. The captain and his men got away in the last lifeboat and at 5.30 am the Niagara gave a shudder and slid hissing beneath the waves. She took with her 295 boxes of gold bars, one of the biggest treasures ever to be deposited in the Bank of the Pacific Ocean.

Two of the Niagara’s lifeboats.

New Zealand was shocked by the loss of the Niagara, although thankful that no lives had been lost. Because the war seemed so far away not everyone believed that the ship had struck a mine. It was decided by barroom lawyers that there must have been an internal explosion, perhaps of a bomb set in the hold by a saboteur. Even after the Prime Minister, Peter Fraser announced in parliament that the navy had found mines in the area, the legend persisted and overshadowed the facts. The authorities knew the truth but no serious effort was made to sweep the mines. This led, months later, to the salvage ship being exposed to grave dangers on two separate occasions.

When news of the shipwreck reached Australia, several salvage interests formed themselves into The United Salvage Syndicate and immediately sent Captain Williams to New Zealand to find a suitable salvage vessel. Williams knew that the depth of water in which the Niagara lay, over 120 meters, was too deep for helmet divers, and before he left Australia he commissioned an engineer from Melbourne to design and build a diving bell.

The bell, cylindrical in shape with a bulge at the top incorporating 14 windows, was an efficient device for lowering one or two people to great depths. Its dead weight was three tonnes, but because of built-in buoyancy, it was just capable of floating. Two 140-kilogram weights could be dropped from the bottom of the bell in an emergency. The diver entered through a circular hatch in the top and was bolted in for the duration of the dive. He breathed through a mouthpiece connected to a canister of sodium lime crystals, which absorbed the carbon dioxide gases from his exhaled breath.

The Niagara/Claymore diving bell in the 1950s looking rather forlorn and out-of-place, on display in the Visitors Center, in Castlemaine Australia

Before Captain Williams could commence salvage operations he had to find a salvage vessel and then locate the Niagara. Both tasks seemed insurmountable at first. All sea-worthy ships were required for war service, and the only unused vessel he could find was an old coastal steamer called the Claymore. She lay abandoned and rusting on a mud bank, stripped of all equipment, with only the engine intact. Williams negotiated with the owners – the New Zealand Government – and bought her for a nominal £1,000. She was pumped out and towed into the dockyard for repairs, then loaded with provisions, kilometers of steel wire rope and other salvage necessities.

Some five months after the sinking of the Niagara, steam was raised aboard the Claymore and a crew, mostly Australians and New Zealanders, settled into the sparse and uncomfortable accommodation. Williams was joined by Captain Heard, who was to be the salvage master, and brothers John, known as Johnno and Bill Johnson joined the ship as divers. Both brothers, who were from the Royal Australian Navy, had formidable records of diving achievements. But before either of the divers could prove their worth the wreck had to be found.

Johnno Johnson getting ready to go down and deal with the live German mine

In December the Claymore began trailing sweep-wires to try to locate the Niagara. What they found almost immediately was a mine. Carefully, the wire was slackened off to allow the mine to sink out of reach of the Claymore’s hull and Johno’ Johnson was asked to go down and untangle the mine mooring wire from the sweep. Without hesitation, he climbed into his gear and went over the side to do battle with the deadly black mine. He struggled for over an hour with a boat hook before giving up, exhausted. As luck would have it, the Royal New Zealand Navy minesweeper, Humphries, then came on the scene. Diver Johnson was asked to re-enter the water to try a new plan. This time, a wire from the Humphries was to be attached to the mine’s shackle so that the minesweeper could pull the device away from the Claymore. Johnson achieved his task only to find his airline had fouled the explosive horns of the mine. As he climbed up the mine to free himself, his helmet banged on the bottom plates of the Claymore. He must have understood the danger only too well, and he gave the signal for the minesweeper to pull astern. Still clinging to the mine, he surfaced only feet from the plunging hull of the Claymore. Less than a month later, when they caught a second mine in their sweep wire, the crew took no chances with their precious diver. Instead, they put a buoy on the sweep wire, cut it, and left the navy to deal with the mine.

The search continued in the warmer conditions and longer days of early summer. One day, after almost two months searching, the sweep-wire fouled something so big that it brought the Claymore to a full stop in the water. The excitement onboard was intense. The ship was anchored above the possible wreck-site, the diving bell was tested and Johnson climbed in to be lowered over the side. The crewmen were on tenterhooks when the bell reached the bottom, waiting for some word from the diver who was dangling on a thin steel wire over 130 meters below.

‘Well?’ called Williams over the telephone. ‘What can you see?’

‘Nothing yet. My eyes aren’t accustomed to the darkness. Hang on. There’s something.’ Williams and Heard strode impatiently around the bridge.

‘What? What is it?’ There was a long silence from the diver below.

‘You’re not going to believe this, but I think what I see is a suitcase standing on end. No! Not a suitcase – there are hundreds all over the sea floor, and…just a minute. Lower the bell down.’ The winches turned slowly, paying out the wire until the bell was resting in the black oozing mud.

‘Blimey!’ Johnson called from below. ‘I can see wooden boxes with tins of fruit in them. Now move the bell right. I think there’s something over there.’ Once again the winches turned, maneuvering the bell delicately towards something huge. The water was dark at that depth and clouded with suspended mud particles, and Johnson strained to see. The shape of a massive wreck materialized but he said nothing until he could recognize certain features that identified the vessel. Quietly he spoke into the telephone mouthpiece on the console in front of him. ‘Pull up the bell, boys. We’ve found the Niagara.’ The silence on the Claymore’s deck was broken with such cheering that Johnson later swore he heard it on the bottom of the sea.

The first job to be done was to survey the wreck. Johnson once again climbed into the bell and was lowered down. Because the Claymore was plunging in the choppy sea, the bell was also rising and falling alarmingly. Johnson decided he would have to rest the bell on the Niagara’s deck so that the lowering cable could be slackened to prevent bouncing. But no sooner had the bell touched down than a sudden and violent gust of wind pushed the Claymore’s head around. The pressure snapped the bow mooring wire and the vessel fell away rapidly before the wind. The bell, connected to the ship by a fragile steel cable, was jerked off its perch and wrenched between two boat davits. Either of which could have snagged the wire but it miraculously remained intact. Almost upside down, the bell banged down over the slope of the wreck’s side, into the hole made by the mine, then just as quickly was jerked out again and landed upside down in the oozing black mud.

Battered and bleeding in a crumpled heap, tangled amongst wires and levers across the bell’s control panel, Johnson must have realized the seriousness of his situation. If the cable was broken and the Claymore was unable to pull him up, he would have little chance of bringing the bell to the surface. He knew that blowing air into the tiny ballast tanks was next to useless, as the minute amount of buoyancy it would give at such a terrific depth would make no difference at all. His only hope would be to drop the two weights from the bottom of the bell and hope that would be enough to lighten the bell sufficiently for it to overcome the suction of the mud. But the cast-iron weights were dropped by gravity and they would not drop off while the bell was upside down. Johnson tried the telephone but it wasn’t working, and this confirmed his belief that the cable had snapped. As he extricated himself from the tangle he must have been very conscious of the lonely lingering death that stared him in the face.

He looked up through the only window not obscured by mud to see a coil of the bell’s cable hanging in a loop. He raised himself to inspect it. The wire had a kink in it and some of the strands were severed where it had snagged on something. Then, slowly, the wire straightened out and the bell came upright; he was being winched up. The cable was unbroken, but the knowledge that it was damaged must have made the trip to the surface a nerve-racking one. Johnson’s luck held, he was safely brought aboard and the wire was replaced. ‘I haven’t had a very nice time down there,’ he said, on being released from what so nearly became his coffin.

The diving bell being hauled on board the Claymore.

When the salvage attempt began in earnest the Claymore was moored by no less than six huge concrete anchor blocks of five tonnes each. Even then, the weather moved the vessel constantly and pulled the blocks out of position, and much time was wasted re-aligning them. If they achieved one day in five actually diving, they considered themselves lucky.

The Niagara’s strong-room was situated in the center of the ship and was extremely difficult to get at. First, the boat deck and hull plates had to be blasted away, and this was done by lowering explosives with the grab – a huge metal claw that could rip a section of the wreck away with ease – or by placing an explosive charge in exactly the right position for maximum effect. The operation of the grab and the blasting were directed by the diver in the bell, in telephone contact with Captain Williams on the bridge, who in turn issued instructions to the winchmen. These men gradually molded themselves into a team that worked like a well-oiled machine.

The bell had to be winched up before each of the explosive shots was detonated, or the concussion would have put the diver in danger. It was also retrieved each time the Royal New Zealand Navy wanted to detonate one of the mines they had been sweeping for in the outer channel. But then the minesweeper Puriri accidentally ran over a mine that had previously been located and buoyed. The mine exploded and the vessel sank, killing five of the crew. Johnson, on the wreck in the bell at the time, said the concussion was so severe that, ‘It nearly blew my teeth out of their sockets.’ He was lucky to survive; once again, his guardian angel was watching over him in the deep dark depths.

Gradually the outer section of the hull was blasted away and the debris was dropped into the mud. There were yet more explosions as a huge hole was torn in the Niagara’s side to expose the door to the strong-room, each shot made up of as much as 50 kilos of blasting gelatin packed into lengths of boiler tube. When these charges were exploded, the Claymore literally leapt a foot out of the water. Many rivet holes had to be plugged with wooden pegs and it was miraculous that she survived such harsh treatment. Once the bullion room door lay exposed there was much debate about how big a charge would be needed to displace it. When it was eventually blown off it fell into the strong-room, obstructing the bullion. Small charges were detonated to widen the door and allow the grab to enter. A grand total of three tonnes of explosive were used to get to this stage of recovery, causing the death of large numbers of fish.

On the morning that the strong-room was to be plundered for its gold, the crew of the Claymore were astir early. As diver Johnson climbed into the bell there were many jokes about how much gold he was to send up for each man. Secretly, every man would have been content to see just one bar of gold that day, to prove they could do it. As things turned out, they got two.

By 8.30 am, before it was properly light, the bell and the grab were on the wreck and Johnson was trying to see through the obscurity. It took over an hour before the diver could properly direct the huge grab into the aperture. At last Captain Williams, relaying directions from below, announced in a calm voice, ‘Up the bell. Up the grab.’ The winchmen brought the bell to the surface and Johnson was released. The grab was brought on board, and there, in the teeth of the steel jaws, was a wooden box. As the jaws opened, the box fell to the deck with a heavy clunk, and out fell two bars of gold. Work was suspended for the rest of the day, and all hands retired to the saloon where they had a huge party to celebrate their success. The value of each bar was £4,500. Captain Williams stowed them in the safest place he could find – in a shoebox under his bunk.

claymore crew
Most of the crew of the Claymore with their first two bars of gold recovered from the wreck of the RMS Niagara, looking extremely pleased with their achievement.

The following day their elation was dampened by disappointment. The anchors were found to have moved and had to be re-sited, and later that day when the diver got down to the wreck it was discovered that visibility was less than two meters, which made the operation of the grab extremely difficult. Should the grab collide with one of the windows on the bell it would instantly be fatal for the diver. When the grab brought up only debris from the bullion-room, gloom and despondency settled over the crew. A few pessimists predicted they had seen all the gold they were ever going to get from the Niagara. By the following evening, however, there were nine boxes of ingots lying on the deck. With a total value of £72,000 sterling, they were enough to gladden any salvager’s heart.

That evening the weather closed in and the barometer dropped alarmingly. The Claymore ran to the shelter of Whangarei, and the captain took the opportunity to off-load the gold to the bank. When word got around that the Claymore’s crew had been successful, the New Zealand authorities, who had previously been unhelpful, went out of their way to assist the crew. They even allowed the Claymore to fit a radio, something they had previously refused.

There was nil visibility on the next dive and a violent storm struck shortly after the bell was raised. The storm abated the next day and by lunchtime, there were four more boxes of gold to go under Captain Williams’ bunk, but shortly after the weather broke again and a series of relentless and violent gales stopped diving for a couple of weeks. The scene that met Johnson’s eyes when he next descended to the Niagara was heartbreaking. Wreckage and debris had been washed into the strong-room by the storm, filling it to the doorway. There was nothing for it but to continue grabbing all the junk out, and laboriously bringing it to the surface for inspection, in case there was an ingot of gold amongst it.

They recovered all manner of debris, from coins to teapots, but no gold and the salvage master speculated that it was being masked from the grab, by some obstruction, possibly the strong-room door, which had never been recovered. The speculation was spot-on and the following day the first thing that came up in the grab was the steel door.

Finally, the grab managed to pick up the strong-room door and bring it on board leaving a clear path for the grab to reach the rest of the gold. Photo Keith Gordon.

Success was now at hand, and gold started to appear on the deck in large quantities. The total catch soon rose to a very satisfactory 189 ingots, with a total weight of nearly three tonnes. The gold bars no longer fitted under the captain’s bunk; they covered his whole cabin floor and presented a serious stability problem for the ship. The total value of the gold recovered soon reached well over a million pounds and this broke the record from any previous bullion wreck in history. Even if they did not recover another gram of gold, the Claymore and her crew had earned their place in salvage history.

Members of the crew with the gold bars that allowed them to claim the record of most bullion ever recovered from a shipwreck at that time.

In order to work out the chances of recovering the final ingots, Captain Williams went down in the bell with Johnson and tried to look into the strong-room with the help of an underwater lamp. On the surface, it was enormously bright but at 120 meters it gave no more than a dull glow that barely penetrated the strong-room. They decided to carry on anyway, but when, after 62 drops of the grab, they had recovered just four more ingots, everyone realized that the job was coming to an end. Not only was the last of the gold probably lost in the inner recesses of the wreck, exterior pressures were mounting. The war in Europe was raging, New Zealand soldiers were in the thick of things and the Japanese had invaded and occupied the Philippines. Salvage divers were required in other parts of the world, and the Royal Australian Navy wanted theirs back.

Johnson went down in the bell to make a professional and efficient final report, venturing right into the strong-room at the risk of getting stuck or fouling some projection when trying to exit. All went well, however, and when he returned to the Claymore he reported that the only gold in sight was the one bar still wedged by the strong-room entrance, and he asked for permission to try to dislodge it with the grab. The chances of success seemed small, but as it was the last tantalizing trace of the treasure to be seen, Captain Williams gave permission.

When the bell and the grab were once again in position, Johnson decided the only way to retrieve the last bar of gold was with shock tactics. He would position the grab far above the gold and then crash it down on the wreck, closing the jaws at the last moment, hoping that the impact would make the gold bounce up into the closing jaws of the grab. It was a slim chance, but there was nothing to lose and £4,500 to gain if it worked. On deck, the excitement was at fever pitch, and absolute silence was maintained while all the crew strained their ears to listen to Captain Williams’ instructions.

‘Down the bell two feet. Up the grab. Stop. Open the jaws. Steady. Drop the grab, close the jaws.’

The captain strained to hear what the diver below was saying over the telephone. Then he looked up smiling. ‘Up the bell, up the grab boys. He’s got it.’ The maneuver had worked perfectly.

A deep-sea grab, identical to the one used to recover the gold.

This brought the salvage operation to a close after 11 months of hard work. In all that time they had only 24 days of actually grabbing for gold, recovering 555 ingots with a total value of £2,379,000 – a staggering 94 percent of the original treasure. By any standard, the retrieval of the Niagara’s gold ranks as one of the world’s greatest salvage successes.

When the Claymore made what everyone expected to be a triumphant return to Whangarei Harbour, their expedition was overshadowed by the news of Japan’s attack on Pearl Harbour. The men were paid off quickly, given their well-earned bonuses and sent home. Only Captain Williams remained behind to de-commission the dear old Claymore, who had served them so well. Wire rope and other salvage equipment were removed and sold, and gradually she once more became a lifeless old hulk awaiting the call of the scrap yard. If ships have souls, as many mariners believe they do, then the Claymore’s must have been in torment. She had been rescued from the mud flats to perform a vital and exciting task, and now she was once again being stripped and abandoned. One night she gave a groan, filled slowly with water and slipped beneath the waves.

The story of the Claymore ended right there but the saga of the Niagara and her gold resumed 12 years later. In 1953 diver Johnno Johnson was back in New Zealand waters taking part in another expedition to recover the remainder of the Niagara’s treasure. This time he was not a diver but an adviser to an American and English salvage venture aboard the vessel Foremost 17.

The first task to confront the new salvage team was to locate the wreck, and there they struck their first problem. No record had been kept of the Niagara’s last resting place, but a nice story is told of how they overcame this difficulty. When Chief Officer Gibson had left the sinking Niagara to enter a lifeboat all those years ago, his pockets had been bulging with papers, including a chart. When a passenger asked him where they were, Mr. Gibson opened the chart and – being without a pencil – used his tiepin to pierce it. Twelve years later he still had the chart with the pinhole in it, and sure enough, the Foremost 17 found the Niagara right where Gibson had marked her.

An ex-Royal Navy diver, Lieutenant Commander Chadwick, was using an armoured mechanical diving suit, which was a cross between the traditional flexible diving suit and the diving bell that Johnson had used. Because the suit could withstand pressure at great depths, it allowed the diver to work underwater for hours but come straight up without the need for decompression. This new type of suit also allowed the diver to clamber inside the bullion room and pick up debris and gold bars with its mechanical hands. It was a tremendous improvement on the bell-and-grab method that Johnson had been obliged to use, and much more versatile.

The type of armoured diving suit used by Commander Chadwick to penetrate the strong room and recover 30 gold bars, left behind by the Claymore divers.

During the 79 days of the salvage operation, Commander Chadwick penetrated the strong-room and recovered 30 of the gold bars left behind by the previous expedition. In Johnson’s opinion, “the five bars of gold still left in the wreck are there to stay And the wreck of a once great ship should be left in peace.”

STOP PRESS. While I was re-researching this story I contacted a New Zealander who probably knows more about the wreck of the Niagara than anyone else alive. Author and underwater explorer, Keith Gordon, who once owned the salvage rights to the wreck is a font of information about the ship and I was hoping he may have some little-known anecdote I could add to my story, to bring it up to the modern day, and he did, but not as I  had anticipated.

I was quite alarmed to discover that Keith wasn’t very interested in discussing the past history or old anecdotes of the Niagara, but much more concerned about its future. Keith is worried because the ship is still full of fuel oil, remember she had filled her fuel-oil tanks prior to a long sea voyage, just hours before she sailed and most of that oil is still in the wreck. Keith has warned the NZ government that the wreck, now 70 odd years old is in danger of collapsing and explained that it is not only rust that is destroying the iron structure of the ship, but at that depth, there are iron-eating deep-sea bacteria that are slowly but surely eating the structure of the ship from the inside.

Keith estimates that despite oil spillage during the sinking and salvage operation and although no survey has been carried out, there could  still be up to 1500 tonnes of heavy oil in the wreck which would, if suddenly released during a collapse, cause an environmental disaster in the pristine waters around Auckland, Northland and the islands of the Hauraki Gulf. An oil spill of that magnitude would kill thousands, if not millions of sea-birds and other sea-creatures, some of which nest nowhere else in the world, and a few of which, are already on the ‘endangered’ list.

Keith Gordon stated, “72 years after the war the wreck is still a clear and present threat to the region and to our natural heritage. We are at present discussing the situation with the authorities and it is hoped action will be taken to carry out a risk assessment survey of the wreck to determine the potential environmental danger the wreck still presents.”

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