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    From Baghdad to the Bund: The Family That Built Shanghai

    For a century, as the Sassoon family’s fortunes rose, so did the city’s.
    Jul 22, 2022#history#Shanghai

    When a consortium of British traders founded a branch of the Gibb Livingston & Co. trading firm in Shanghai in the late 1830s, the city was little more than a walled town. It would be another seven years before Shanghai was fully opened to foreign trade, but international investment took off almost immediately thereafter. From 1843 to 1949, more than 1,800 foreign firms from 34 different countries opened in the city, covering almost every product imaginable.

    Even vast multinationals require people on the ground to run their operations, and so it was in Shanghai, where a class of merchant families emerged to facilitate and manage this booming international trade. Many of the most prominent, such as the Sassoon family, the Arnhold brothers, and the Kadoorie family, were of Jewish ancestry. Together, they helped remake Shanghai from a backwater into one of the world’s most important trading hubs.

    Even by the standards of Shanghai’s rough-and-tumble business community, the Sassoon family was legendary. They were the first Jewish merchants to hang their shingle in Shanghai in the treaty port period, and for four generations they dominated the city’s business circles. In the words of one Japanese scholar, “Shanghai cannot be understood without the Sassoons.”

    The Sassoons originally hailed from Baghdad, where family patriarch Sassoon ben Saleh served for many years as the city’s chief treasurer. In the early 19th century, however, rising antisemitism, stoked by the city’s new governor, caused Sassoon ben Saleh’s son, David Sassoon, to lead the family to the Persian Gulf, and from there to the booming British-controlled port of Bombay — today’s Mumbai. Once settled, he founded the David Sassoon & Sons Company, which quickly grew to become one of Bombay’s largest trading firms.

    Shanghai was forcibly opened to foreign trade by the Treaty of Nanjing in 1843. In 1845, David Sassoon set up a David Sassoon & Sons branch in the city, making it one of the first Jewish trading firms to enter China. At first, the company primarily trafficked in opium and English textiles, but David Sassoon soon turned his sights to finance. In August 1864, he co-founded, along with representatives of other key foreign firms in the region, the Hongkong and Shanghai Bank, which officially opened for business the following year.

    David Sassoon would not live to see the new bank open. He died in late 1864, leaving behind a vast Asian business empire worth 4 million British pounds (roughly $380 million in today’s dollars), with operations in London, Baghdad, Hong Kong, Shanghai, Yokohama, and Nagasaki.

    After David Sassoon’s death, management of the estate passed, according to Jewish tradition, to his eldest son, Abdullah Sassoon, who shifted the family’s focus to Bombay. The China-based Elias Sassoon, David’s second son, disagreed with his brother’s decision, and in 1872, Elias and a handful of other Sassoon family members set up another Bombay-based business, Messrs. E.D. Sassoon and Company, Bankers and Merchants — better known as the “New Sassoon” to David Sassoon & Sons’ “Old Sassoon.”

    Although its headquarters remained in India, New Sassoon invested heavily in China. In 1877, Elias paid 80,000 silver taels to purchase a plot of land on the best part of the Shanghai Bund, where the north building of the Peace Hotel stands today. By the 1920s, the property was worth 1.7 million silver taels. (At the time, one British pound was worth a little over six silver taels.)

    That was just one of New Sassoon’s many holdings in the city. Historian Tang Peiji estimated the value of New Sassoon’s real estate empire at 13.3 million taels in 1921.

    But the Sassoon whose legacy looms largest in Shanghai wasn’t David or Elias. That would be Elias’ grandson, Victor Sassoon. Born in 1881, Victor was injured in the First World War, leading some in China to refer to him as “Lame Sassoon.” When Victor took over New Sassoon in 1923, one of his first moves was to transfer the firm’s operations from Bombay to Shanghai. The decision played a key role in transforming Shanghai from a trade port to the business capital of the East.

    In addition to symbolic gestures, Victor Sassoon greatly expanded New Sassoon’s operations, even getting involved in the international arms trade. At the time, warlords were battling for control of China, and New Sassoon made huge profits selling them outdated weapons at a premium. From 1928 until the outbreak of the Pacific War in 1941, New Sassoon’s seven subsidiaries registered a profit rate of over 90%.

    The biggest of these dealt, not in weapons, but real estate. It’s not an exaggeration to say Victor Sassoon built modern Shanghai. Investing in property development, the Sassoons began building high-rises in 1925, including the Sassoon House (the Peace Hotel’s north building) as well as the Cathay Mansion and the Grosvenor House, which today are the north and middle towers of the Jinjiang Hotel. All three are still among the most famous buildings in the city.

    After four generations and nearly 100 years in the city, the Sassoon family’s assets prior to Japan’s invasion of China in 1937 totaled 5 billion francs. For comparison, the British American Tobacco company had total assets in China of around 600 million francs.

    It was a golden age, for Shanghai and the Sassoons alike. But all good things come to an end. Even prior to the Pacific War, the Sassoons started to move some of their money out of Shanghai. After the Second World War and the Japanese occupation of Shanghai, they tried to return to pick up where they left off, but the turbulence of the Chinese Civil War made recovery impossible. In 1948, just months before Shanghai was taken by the People’s Liberation Army, this legendary family began pulling out of the city.

    Today, when Shanghai looks back at the history of its Jewish community, it tends to focus on the city’s role as a refuge for Jews fleeing the Holocaust in the 1930s and ’40s. But this community wasn’t a mere blip in the city’s historical record. Whether as merchants or revolutionaries and fighters, Shanghai’s Jewish residents have as much claim to the city’s legacy as any other.

    Translator: David Ball; editors: Wu Haiyun and Kilian O’Donnell.

    (Header image: From left to right, the HSBC building in 1908, the 1862-built office of Messrs David Sassoon & Co., Victor Sassoon, and the Metropole Hotel and Hamilton House. Visuals from Huang Wei and VCG, reedited by Sixth Tone)