The Sassoon Dynasty
How a refugee family settled in Bombay, earned billions from the Opium Wars, saved Jewish families from the Nazis - only to throw away their fortune and now their name is just a footnote in history
Hi there,
For anyone who has visited Mumbai, you might have heard about the Sassoon Docks or David Sassoon Library and Reading Room. These institutions were gifted to the city by David Sassoon and his family, the dynasty which helped build the India we know today, and modernized Shanghai’s skyline in the late 1920’s.
This was a dynasty started by a refugee seeking his fortune in Bombay whose sons rose to dominate the opium supply chain, and went on to rub shoulders with British aristocracy, only to see their fortunes dwindle and dissipate and by the 1970s, the company started by the patriarch - David Sassoon & Co. dissolved.
This is the story of the Sassoon Family.
David Sassoon finds a new home in Bombay
Born in 1792 in Baghdad, David Sassoon was groomed to become the Nasi (President) of the city’s Jewish community. His father was the chief treasurer to the Pashas (the governors of Baghdad). The family presided over the Baghdadi Jews and advised the Ottoman rulers on how to run their empire.
At the core of their influence was their centuries of experience as merchants. The family would trade gold, silk, spices and wool across the Middle East, making them Baghdad’s richest merchants.
But before he could assume his role as Nasi a power struggle among the Ottoman rulers put a faction hostile to the Jews in power. The new ruler began harassing and imprisoning the Sassoon’s, demanding ransom.
Faced with persecution, David Sassoon was forced to flee Baghdad, where his ancestors had lived for the previous 2,500 years. He had to forgo his family’s wealth and his birthright, eventually moving to Bombay seeking the stability and protection of the British empire.
After a few years of arriving in Bombay he cultivated relationships with the governor and other wealthy local businessmen but being an outsider meant that he was cut off from the British companies and banks that dominated the Indian trade. He needed to think creatively.
Leveraging his education and ability to speak multiple languages - David builds factories
Sea trade was booming, and captains and deck crews had information about the happenings across the world. Mingling with the captains on the docks talking with them in their native language be it - Arabic, Persian or Turkish gave David key bits of commercial intelligence.
David learned that demand for Indian cotton was rising but buyers complained that the bales bought from India contained too many stones. Sensing an opportunity, David imported new cotton gins that produced better quality cotton.
Relying on his 8 sons, he built an extensive trade network in cotton, textiles, opium, tea, and other commodities.
After the end of the First Opium War in 1842, Sassoon leveraged his textile operations into a profitable triangular trade: Indian yarn and opium were carried to China, where tea and silk were bought which were sold in Britain, from where the empty cargo ships would be filled with Lancashire cotton products to be sold in India.
Furthermore, seeing China as a new market for his goods he supported the British invasion of China.
Profiting from the Second Opium War
Post the end of the Second Opium War in 1860, it was legal to sell opium all across China.
The Sassoon family outwitted their Parsi rivals by employing a clever business strategy. They would negotiate directly with Indian farmers, lending them money to cultivate the crop in exchange for the exclusive right to buy the harvest and distribute it throughout China.
Another windfall came in during the American Civil War, during which demand for Indian cotton skyrocketed and David Sassoon & Co were perfectly positioned to take advantage of it. Its established trade routes throughout the world were able to quickly adapt to the changing market needs.
As shown by their shrewdness in adopting the cotton gin earlier, the family was always at the forefront of adopting technology that could help them.
The family understood the potential in the telegraph - some of the first telegrams in Asia were coded messages sent from one Sassoon office to another. Located in Bombay, Hong Kong and Shanghai the executives discussed the demand for opium in the various cities enabling them to supply opium - only when the price was high.
Billions in profits due to Opium
It was opium that powered the Sassoon’s expansion across Asia, and by the 1870s they had cornered the narcotics market to a degree Pablo Escobar would envy.
As per two Chinese economists, the profits solely from the opium trade raked in $2.7 billion in 2018-dollar terms for the family.
The trade cemented the family fortune at the expense of the drug addled Chinese.
The taxes on sale of opium supported the British colonial rule in India at the expense of the Indians.
Profits powered philanthropy for the Sassoon family
Deeply devout, David Sassoon earmarked a percentage of his firm’s profits for charity work. In each trade he enforced a “tax” which went to the various charities the family sponsored.
The family contributed to building the Sassoon General Hospital in Pune, the Magen David Synagogue in Byculla, the Victoria and Albert Museum, now renamed as Dr. Bhau Daji Lad Museum, again in Byculla and constructed numerous schools in addition to the Sassoon docks and reading room. These are institutions which run to this day.
David leaves behind a complicated legacy
David Sassoon was a complex character driven by profit yet devoted to philanthropy. He saw British colonial rule as beneficial to the country. During the Sepoy Mutiny he contributed to and raised money for the British cause. He offered to assemble and equip a Jewish legion to fight in case the rebellion spreads.
After his death in 1864, his two eldest sons, Sir Albert and Elias, succeeded him in running the family business.
Later on, the two brothers had a power struggle and Elias started his own venture called E.D. Sassoon & Co.
While David’s sons maintained strong connections with Bombay for many years post the patriachs’ death, several members of the second and third generations eventually immigrated to the United Kingdom.
As per historians, the later generations traded in their distinctive Baghdadi Jewishness for wealth and inclusion into British aristocratic life. Having made their fortune, they now wanted to spend it on horse races and bungalows in London. They did not want to do the hard work of running a global enterprise and managing employees.
The family fortune got divided then dwindled and dissipated.
Now, the Sassoons are spread across the globe in London, Jerusalem, Washington D.C. and New York and in professions ranging from banking to government service to arts to rabbinic studies.
However, the story of the Sassoon’s and their impact on the region continues with another branch of the family, led by Elias’s grandson Victor.
Their impact would reach as far as Shanghai and reshape the city.
Victor Sassoon and India - a love hate relationship
In 1924, E.D. Sassoon & Co was inherited by Victor Sassoon, the grandson of Elias.
Victor was a World War I veteran, a plane crash crippled Victor - compelling him to use crutches to move around.
He showed a special talent for finance. With factories and investments in India, China and Britain he took advantage of fluctuating currency rates. If Parliament was raising taxes in Britain, he would funnel profits through subsidiaries and trusts in Hong Kong to avoid the higher tax bill.
He was appointed to the colonial National Legislative Assembly in India as a representative of the textile industry. He supported a law which limited the workweek to sixty hours and raised the minimum age of workers to twelve, over the objections of many of his fellow millionaires.
But Victor saw multiple threats looming on India’s horizon - socialism, the independence movement, and an anti-British bias.
In 1925, he proposed building a private racecourse at the cost of $500,000 at the same time Victor and other Bombay mill owners were proposing to reduce workers’ wages citing declining demand for textiles. There was outrage in the city reconciling the wishes of a millionaire with demands of the working class.
This kind of instability shook Victor’s nerves and made him start looking towards Shanghai.
Move to Shanghai
In contrast to India, Shanghai was stable and booming with little political agitation.
The Shanghai International Settlement was an area governed by tycoons, for the tycoons. With their own court system, a police force, administration, and ability to levy and collect taxes. Practically, the settlement was run without interference from the Nationalist government.
Believing that Shanghai was brimming with opportunities and India was in decline - Victor liquidated his family’s nearly century old holdings in India - approx $400 million - and moved to Shanghai.
Once in the settlement, Victor got to work quickly, amassing properties and leaving his stamp on the Bund (waterfront area).
He bought the most prominent site in the International Settlement, overlooking the waterfront and built the Cathay hotel which rivalled the most luxurious hotels across the world.
The Cathay served as the shining jewel in his crown. He wined and dined with the ruling elite and movie stars of the generation entertaining them at the Cathay.
Over the years he transformed the skyline of Shanghai by building several apartment and office blocks all having regal British names.
To his property empire, Victor added textile mills, timber trading, shipyards, the Shanghai bus company, auto dealers and a brewery.
When a vacant lot became available next to the Cathay Hotel, rumors swirled that the intended buyer - the Nationalist government would construct a building taller than the hotel. Using his heft in the Shanghai Municipal Council, he ensured the proposal was rejected on “technical grounds” ensuring the Cathay remained the tallest and most prominent building on the Bund.
But the good times for the rich did not last, with the first punch thrown by the Japanese when they invaded China and occupied Shanghai in 1937.
The family’s philanthropic side rose to the occasion, especially for the Jews that were fleeing Hitler’s persecution.
Providing refuge to those in need
With the rise of Hitler, Jewish immigrants started flocking to the International Settlement seeking refuge. For the immigrants there was simply very few options to run to.
Seeking to raise funds to provide for housing and food Victor contacted Charlie Chaplin and enlisted his help. Chaplin contributed some of his income from The Great Dictator. The money raised led to doctors being able to open clinics, and others to establish workshops and industries.
During the Japanese occupation of China, Victor along with other Jewish business families such as the Kadoorie’s helped protect, feed and house 18,000 Jewish refugees fleeing Hitler’s atrocities.
The continued Japanese occupation of Shanghai led to Victor fearing for his life and boarding a ship for India in the fall of 1941 - just weeks before the attack on Pearl Habor. The Japanese converted Hamilton House, one of Victor’s luxury apartment complexes, into their headquarters signaling they were the boss of Shanghai.
During the Japanese occupation of the International Settlement, the wealthy were put inside internment camps and the refugees were bundled into a one-square-mile area where Jewish refugees lived side by side alongside 100,000 Chinese. Food and medicine were in short supply but miraculously the people survived.
In 1945, as American soldiers liberated the city the Jews and Chinese celebrated together, they tore down the signs and borders of the ghetto and celebrated their fortune of being alive against severe circumstances.
Victor Sassoon sent all his Jewish employees checks for three years’ salary - the three years they had been unemployed and forced to live in the ghetto.
Victor landed in Hong Kong soon after the Japanese surrender, but he held no illusions about his investments in Shanghai.
Wealth inequality and racism - byproducts of the Shanghai Boom
While the Sassoon’s had helped reshape Shanghai, inequality and racism were pervasive to the International Settlement.
The settlement was built around serving the needs of foreigners, primarily the British, with locals flocking to it to escape the chaos surrounding China.
A visiting American journalist wrote, a foreigner “lives in a world unto himself.” To them the Chinese workers were just tools to be discarded when not useful.
In 1935, the Shanghai Municipal Council collected 5,950 Chinese corpses from the streets of the International Settlement - residents who had died of starvation or disease and whose families were too poor to bury them.
The Cathay was off limits to all but the wealthiest Chinese.
The stark divide between the rich and the poor helped fan the flames of communism in Shanghai.
The Americans turned the day-to-day running of the city to the Nationalist government. Little noticed in the drama of the war, the Americans and British in 1943 had agreed to end the arrangement which put all foreigners and foreign businesses above the Chinese law. The bubble which made the Sassoon family wealthy in Shanghai popped. The Chinese controlled the city now. But which party?
Communism comes calling
During World War 2 and the Japanese occupation, the Communists and Nationalists had agreed to a cease fire in the Civil War that started back in 1927. The end of World War 2 signaled the war’s resumption; and a Communist victory would ring the death bell to businessmen.
The Communist’s won the war and began taking over the Sassoon businesses.
Much of Victor’s wealth which had made him one of the richest men in the world in the 1930’s, was tied to the Cathay Hotel (today it’s called the Fairmont Peace Hotel) and scores of other buildings he owned in Shanghai which the Communists seized.
His empire collapsed.
Over the years descendants of Victor made efforts to get the Chinese government to compensate them. They were always rebuffed.
The luxury-loving Victor opted to live his remaining years in the Bahama’s, pursuing his passion for horse racing, travel and amateur photography.
Without the involvement of a Sassoon, his company soldiered on for another decade until, with only diminishing profits to its name, it was eventually broken apart and sold in 1970’s.
The Sassoon’s family wealth grew and waned with that of the British Empire and withered away in the end.
My takeaways
David Sassoon’s fortunes turned sour overnight, but he figured out a way to thrive - It takes mental fortitude to pick up broken pieces and move on ahead. Shifting to a new country, not knowing the language - David did not speak or write English - if I had to do that am I strong enough?
We live in an era of peace. We don’t know poverty, hunger, dire prospects. For Jews they were mercilessly persecuted - no country would accept them. Would I survive in such stressful situations?
The above story comes from Jonathan Kaufman’s “The Last Kings of Shanghai”. If you like the above story you will love reading this book - it shows in detail Sassoon’s life in Bombay and then in Shanghai.
Also the book highlights another family - The Kadoories and their impact on Shanghai and Hong Kong in comparison to the Sassoons. I have been obsessed with this book for the past two weeks and if you have made it till here do yourself a favour and read it.
P.S. Untold Stories from the Sassoon Family Archives
I found the below two stories about female members of Sassoon Family inspiring.
Rachel Beer was born in Bombay in the Sassoon family and later immigrated to London. She has the distinction of being the only woman to have edited two national newspapers, the Sunday Times and the Observer, and both at the same time.
Flora Sassoon, who from 1895-1901 managed the Bombay office of David Sassoon & Co., and thus has a claim to be the first woman to steer a major global business. She was a total bad ass and went above and beyond not only for her employees but also for the locals during the cholera epidemic. She supported Waldemar Mordecai Haffkine, who had developed an effective vaccine against cholera and led a campaign to get the population inoculated despite the reservations of both Hindus and Muslims.
She was ousted in a coup by the male members of the family under the pretense she has three children how will she manage the business? Patriarchy truly transcends the ages.
I hope you enjoyed this edition of Filtered Kapi.
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Filtered Kapi #46 - Someone sent you this?
This family lived, thrived & died during times of such peril
Beautifully written