David Sassoon & Co.

Why Shanghai knows the name

David Sassoon & Co. was the first Sassoon house, founded in Bombay in 1832 and known in Chinese as 老沙逊洋行 (Lǎo Shāxùn Yángháng), “Old Sassoon”. It opened in Shanghai in 1845 and traded there in opium, cotton and textiles for the rest of the century. After a family quarrel produced a second firm, E. D. Sassoon & Co. or “New Sassoon”, the older house slowly lost ground to it.

How did a Baghdad treasurer start a trading house in Bombay?

David Sassoon, born in Baghdad in 1792, had served as the city’s treasurer between 1817 and 1829. He left for Bombay with his family; the sources give 1830 or 1832 for the move, and 1832 for the firm itself. It began as a counting house at 9 Tamarind Street, working in banking and property before trade.

The firm grew through its sons. Abdallah, later Sir Albert Sassoon, became a partner in 1852 and Elias David Sassoon joined soon after. After David’s death on 7 November 1864, Albert took charge. That succession is the root of the quarrel that split the family.

How did the firm get into China?

China opened to foreign trade after the Treaty of Nanking in 1842. The firm moved early. Betta places the Hong Kong office in 1843 and the Shanghai office in 1845, and says the Shanghai office stayed the main focus of its China operations for the following century. Wikipedia lists further branches in Canton and Hankow, and in Japan at Kobe, Nagasaki and Yokohama. An office on the Shanghai Bund was in use by 1845, according to a book cited there.

Opium and cotton were the staples. In the 1860s the firm began to dominate the trade between India and China, partly by buying the opium crop before it was harvested and so undercutting British houses. It ran its own opium clippers. Dent & Co., one of its rivals, went bankrupt in 1867, and Jardine Matheson ceased to matter as an opium dealer in the early 1870s. Wikipedia says the Sassoon firm handled around 70 per cent of the Indian opium traded by then, but that figure has no source in the article, and no other source read for this entry repeats it.

Banking followed trade. The firm was among the merchant houses that founded the Hongkong and Shanghai Banking Corporation in 1865, helped set up the Anglo-California Bank in 1873 and was the principal funder of the Imperial Bank of Persia in 1889.

What happened to the Shanghai staff and clients?

The Shanghai office drew its clerks and managers from Baghdad and India. In 1906, 22 of the 42 Baghdadis employed by the city’s Baghdadi Jewish firms worked for Sassoon firms. Silas Hardoon’s career shows the link: the Shanghai gazetteer says the Sassoon firm sent him to Shanghai in 1873, and that in the late nineteenth century he and the older firm jointly ran the opium exchange, the 洋药公所. In 1886 he moved to the property department of the New Sassoon firm. English Wikipedia dates his arrival earlier, to 1868.

Why did the family split, and who won?

Wikipedia, citing Stanley Jackson, says Elias David Sassoon left the family firm in 1867, three years after his father’s death, after quarrels with his brothers and set up E. D. Sassoon & Co. in Bombay and Shanghai. Sixth Tone and a Chinese firm dictionary date the new firm to 1872. The Chinese names for the two houses, 老沙逊 and 新沙逊, come from that division.

Measured by capital, the new firm won. In the Edwardian years it stood at £1.25–1.5 million against about £0.5 million for the old one. Sixth Tone says that by the end of the nineteenth century New Sassoon had gradually displaced Old Sassoon in Shanghai.

How did the old firm change after the split?

In 1872 the head office moved from Bombay to 12 Leadenhall Street in London, to be nearer capital and information. In Bombay the firm turned to industry: the Sassoon Spinning and Weaving Company was founded in 1874 and eventually ran seven cotton mills, Sassoon Docks opened in 1875 and a silk mill followed in 1883. In 1901 it became a joint-stock company with £500,000 of capital, giving shares to non-family managers for the first time. After Sir Edward Sassoon’s death in 1912, Frederick David Sassoon dominated it until his death in 1917, and David Gubbay chaired it until he died. By 1939 Sir Philip Sassoon was chairman in name only.

What did the firm mean for the Settlement?

Its partners sat in the Settlement’s government. Until 1904 the Baghdadi Jewish members of the Shanghai Municipal Council were partners in Sassoon firms, and between 1869 and 1921 Baghdadis elected a councillor almost every year to the British quota of six seats. Betta draws the conclusion that the Sassoons had a direct hand in the affairs of the International Settlement. The family also underwrote the community’s institutions: it sponsored the Beth El synagogue founded in 1887, and a visitor in 1888 reported that without the Sassoon family’s liberality the congregation, then 30 to 40 members, would not have continued.

The scale of the later Shanghai business gives a measure of what the older house had left behind. Sixth Tone, citing the historian Tang Peiji, puts the New Sassoon firm’s Shanghai real estate at 13.3 million taels in 1921, from a start in which Elias paid 80,000 taels for a Bund plot in 1877. Nothing comparable is recorded for Old Sassoon in the sources used here, which is itself a sign of how the two firms diverged.

What the sources disagree on

• Founding: the firm is dated to 1832 in Bombay; the Chinese firm dictionary describes a Shanghai-based “Sassoon, Sons & Co.” founded in 1832, which the other sources do not support.
• Hong Kong and Shanghai offices: Hong Kong 1843 or 1844; Shanghai 1845.
• Split of the family firms: 1867 or 1872.
• Opium share: about 70 per cent (unsourced), against the family fleet carrying about one-fifth of China’s imports (a different measure; see the family entry).

How did it end?

After the Second World War the firm was a shadow of what it had been, in the words of Joseph Sassoon’s history as quoted by Wikipedia. It was sold in 1982 for about £2 million to the London stockbroker Rowe Rudd and later passed to UBS. In Shanghai the older house had lost its role long before: Betta says that by the late 1920s the significance of the Sassoon firms in the city had diminished, and the property boom of the 1930s belonged to New Sassoon.

What to look for

There is no building in Shanghai that belonged to Old Sassoon alone, and its Bund office of the 1840s is gone. The family’s presence is easier to see through its later firm: the Bund tower of 1929, Sassoon House, belonged to New Sassoon. The two names survive mostly in the Chinese phrase 老沙逊洋行 and in the archives.