Mercury was delivered in 1934 from the Fairfield Shipbuilding and Engineering Company, Glasgow, her quasi-sister ship, Caledonia, coming from the Denny yard at Dumbarton in the same year. Over the next 6 summers Mercury and Caledonia served the Coast resort in a post-Depression revival of the Clyde excursion trade. However, as the 1930s progressed the clouds of war gathered over Europe and, in common with other Clyde paddle steamers, she was requisitioned into the Royal Navy. HMS Mercury and the other paddlers served in many roles during the War but they were most commonly recognised in the dangerous business of sweeping vital sea areas for enemy deposited magnetic mines.
By late 1940 Mercury and Caledonia (renamed HMS Goatfell for wartime service) were based at the vast natural harbour at Milford Haven in south west Wales. From there they swept sea areas icluding the southern part of the Irish Sea, the Bristol Channel and the south coast of Ireland and it was while minesweeping in the latter area on Christmas Day, 1940 that Mercury was fatally damage when a mine exploded closeby. Although her Clyde sister tried to tow the damaged paddler back to the safety of Milford Haven it was to prove a futile exercise and Mercury sank in relatively deep water.