The Rothschilds of the East – The Incredible Story of Sassoon Family

What is common to Bombay and Shanghai? 

They’re two of the busiest ports in the eastern hemisphere, yes. They were both centres of Jazz era decadence in the glory days of the British Raj, yes.

And they both owe much of their architectural heritage to a family of Baghdadi Jews by the name of Sassoon. At the peak of their influence in the late 19th century, the Sassoon family of Bombay were one of the wealthiest families on earth, earning them the moniker of the Rothschilds of the East.

How did the Sassoons of Baghdad end up in Bombay and Shanghai, and how did they become so fabulously rich?

The answer is to be found in the infamous opium trade of the 19th century, that led to two wars between Britain and China, and in twisted tales of tea.

Of Opium, and  the World’s Favorite Beverage

The story of the Sassoons, and the opium wars of the 19th century begins two centuries earlier with the world’s favorite beverage – tea.

In the 16th century, as European trading ships began to criss-cross the globe in search of fortune, they unknowingly stumbled upon one of the world’s best kept secrets – tea.

Although tea was the national drink of China, it was unknown to much of the world outside.  It was the Dutch who first brought Chinese tea to Europe, where it quickly became the favorite drink of European royalty. In 1662, when the Portuguese princess Catherine of Braganza married Charles-II of England, she brought in her dowry two things that would set in motion a chain of events resulting in the Opium Wars, and the financial dominance of the Sassoon family. One was a casket of tea, which the Portuguese traders had been importing from China, and the other was a charter from the King of Portugal transferring to the East India Company the control of a small port on the western coast of India which the Portuguese hitherto controlled. This port was the city of Bombay. 

Watching their new, charming, Portuguese queen sip the exotic Chinese beverage soon caught the fancy of the British masses, and in no time, tea became the favorite English drink where it was unknown till then. Within a century, the demand for Chinese tea in Britain had skyrocketed to the extent that a significant proportion of British silver was being drained out of the empire and into the Chinese treasury to quench Britain’s seemingly never-ending thirst for tea. 

This trade imbalance of monstrous proportions was further compounded by the fact that while the British were buying up copious quantities of expensive Chinese tea, the Chinese wanted nothing that the British had to sell.

Except one thing – opium.

Opium was a crop that grew well in much of northern India, which the British by now controlled, and was in demand in China, albeit illegally. Aware of the insidious effects of opium addiction, its cultivation, consumption, and trade was prohibited by the Chinese Qing regime.

This meant that the British could not simply sell opium to the Chinese government. So they did the next best thing. They decided to bypass the Chinese government altogether, and sell it straight to the people. Through smugglers and drug peddlers, of course. 

So, in essence, the British encouraged private Indian and British merchants to procure opium from India and sell it to Chinese smugglers. The strategy worked. In no time, the trade imbalance between Britain and China was overturned in Britain’s favor. It also led to an epidemic of opium addiction in China, rendering waste successive generations of its youth, forcing the Chinese to fight, unsuccessfully, two wars against British high-handedness known as the opium wars. But that is a story for another day. 

Enter : The Sassoons of Baghdad

The Sassoon family’s tale of adventure in India began when its patriarch, David Sassoon, migrated to India from Iraq, following the persecution of Jews there. Dressed in flowing robes and turbans, the customary attire of the west and southern Asia, rather than the Jewish hat, David Sassoon must have resembled yet another journeyman from the Arab world. Around 1832, David Sassoon arrived at the port city of Bombay, which, after having been handed over to the British by the Portuguese following Catherine of Braganza’s marriage to Charles II,  was beginning to flourish as the East India Company’s main trading port on the Arabian Sea. With the star of the British Empire at its zenith, Bombay attracted journeymen, fortune-seekers, mercenaries, and entrepreneurs from all corners of the globe, and Sassoon was just one among the many soldiers of fortune washing up on the shores of Bombay to try his luck under pax Britannica. Much like the Delhi Darbar to the north, where the princes of India paid court to Her Majesty the Queen, the Bombay Darbar in southern India was flourishing as the home of business tycoons taking a bow to laissez-faire capitalism.

Sassoon soon went into business trading cotton, which was a hot commodity then. India in the 19th century was a leading producer, along with America,  and British cotton mills in Lancashire were guzzling raw cotton like there was no tomorrow. This brought Sassoon directly in competition with Parsi traders who had dominated the trade till then. But Sassoon had the advantage of better international connections – members of his community of Sephardic Jewish people were spread all over the globe, from Iraq to England to America, whereas the Parsis had little reach outside of India.  

The American Civil War broke out a few years after Sassoon went into the cotton business, and causing a decline in cotton production from the American south, where the free labor of African slaves was used to produce cheap cotton. This left India the only major supplier to British cotton mills, and David Sassoon saw his opportunity. Using his connections among the communities of Jewish people in Europe and America, he managed to secure huge contracts with British mills allowing him to undercut Parsi competition, and accumulate huge wealth.

Cotton was white gold in the 19th century. But throughout human history, few commodities have made people so fabulously rich in so short a time as narcotics. ( think Pablo Escobar or Walter White from Breaking Bad). And so it was with the Sassoon Family.

When in the 1860s, a British empire desperate for trade parity with China allowed private traders to smuggle Indian opium to China, the Sassoon family leveraged the capital, know-how, and logistical machinery it had accumulated through trading cotton to emerge as the leading suppliers of opium to Chinese smugglers. However, as always, there was competition from other Indian and British opium traders, among them, the firm of Dwarkanath Tagore, the grandfather of Nobel laureate Rabindranath Tagore.

Drawing once again upon his ruthless drive, his incisive business acumen, and his uncanny knack for reading the ground, Sasson did two things that allowed him to blow his competition, quite literally,  out of the water. First, he started procuring opium directly from the cultivators, something which his competitors – elite Indian upper castes and Europeans – seemed both unwilling and incapable of doing. And second, he started shipping his opium via small, swift boats called “opium clippers”. These boats were faster than larger barges that took several months longer to reach Chinese ports. Sassoon was thus procuring his product cheaper, and shipping it faster to the market. In no time, this left the Sassoon family the undisputed masters of the Opium trade between India and China. By the close of the 19th century, the Sassoon family of Bombay were one of the richest families in the world.

The Sassoon Legacy

The Sassoons gave generously of their accumulated wealth, building a large number of hospitals, libraries, and other public buildings in Bombay. Several of these, such as the Sassoon Docks, and the Sassoon Library survive to this day.

With the beginning of the 20th century, the Sassoon family sensed business opportunities growing in China, and they soon set up branches in Shanghai. Members of the Sassoon family moved continually between Bombay and Shanghai, linking the two cities intimately in their intricate web of business, finance, and real estate enterprises. 

By now, the Opium trade was dead, but the family had branched into a number of operations, including banking. The Sassoons were one of the founding members of the Hong Kong and Shanghai Banking Corporation (HSBC), one of the largest banks in the world today.  Members of the family no longer dressed in Baghdadi robes and turbans but in Savile Row suits and occasionally, the Jewish hat. Shanghai soon became the primary base of the Sassoon family and like they did in Bombay, they built several buildings there that survive to this day. The most famous among them is the Cathay Hotel, also known as the Peace Hotel on Shanghai’s historical waterfront, The Bund. The hotel, built in 1929 by Victor Sassoon, a Cambridge-educated real estate tycoon, is also home to the Sassoon House, which was one of the first skyscrapers in the eastern hemisphere. 

The Cathay Hotel of Shanghai became a landmark of the east- a den of the indulgent, Jazz-soaked, decadence that characterized the inter-war years. From Hollywood aristocracy to European nobility to Indian Maharajahs, everyone stopped by the Cathay hotel of Shanghai for a good time. The Cathay Hotel of Shanghai became a symbol of the age – of Jazz bands, ball dances, of card rooms filled with expensive cigar smoke that hung over pomaded hair in a blue haze. Of laughter, joy, deception, lust, caution. Its charmed circle of patrons drawn from the upper crust of the far East, cocooned in their little world of art-deco opulence, unaware, like everyone else, of the dark clouds of war and revolution gathering on the horizon.

With the Second World War, and the victory of the Communist Party, the age of foreign business tycoons in China came to an end. The Cathay Hotel was converted first into a government building, and later, renamed the Peace Hotel. 

In Bombay too, the end of the British Raj, and the coming to power of a socialist government in India signaled the end of the era of global laissez-faire capitalism in which merchants and soldiers of fortune could wash up on alien shores and build vast fortunes under the smiling paternalism of the British Raj. The Sassoons of Bombay and Shanghai, formerly of Baghdad, having made their fortunes in the orient, packed up and quietly sailed away into the western sunset. Members of the family settled variously in London, New York, and the Bahamas. 

The family, though no longer conspicuous in global affairs, continues to wield considerable wealth.  For instance, members of the Sassoon family owned the popular cafe chain The Coffee Bean and Tea Leaf, which they sold to Jollibee Foods in 2019 for USD 650 million.

In 2007, the Cathay Hotel of Shanghai was renovated and opened once again in its former splendor. It is now operated by the Fairmont group of Canada as the Fairmont Peace Hotel. 

The Sassoon Docks continue to be an important commercial hub in the city of Bombay (now called Mumbai). A legacy of the glory days of the Bombay Darbar, it is now a popular marketplace for fresh fish and Bombay street food.

David Sassoon, the founder of the Sassoon business empire in India and China is buried at the Ohel David Synagogue in the Indian city of Pune, some 180 kms to the east of Bombay. It is the largest synagogue in Asia outside Israel and was built by David Sassoon himself in 1863, a year before his death. The synagogue still serves as an important landmark for the small community of Jewish people in India.

Surprisingly, for a family with such a big impact on history, there exists a dearth of published literature. If you’re interested in reading more, here are some of the best books, on the history of the Sassoon family, and their time in Shanghai and the Bombay Darbar.

The Global Merchants: The Enterprise and Extravagance of the Sassoon Dynasty by Joseph Sassoon is an insider’s account of the rise of the Sassoon family by one of its members.

The Last Kings of Shanghai: The Rival Jewish Dynasties That Helped Create Modern China by Jonathan Kauffman is a fascinating tale by an outsider of the Sassoons and the other Jewish families, and their time in Shanghai. As the title suggests, this one is a rollicking read, and an Amazon bestseller to boot.

The Sassoons: From Outsiders to Insiders of Empire 1830 – 1910 by Beatrix Conti is a shorter, but more dense semi-academic read if you are looking for something more critical and serious.

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