Sassoon Again

City of unorthodox booms is Shanghai, a paradise of moneychangers and middlemen. Throughout Depression I Shanghai built itself the tallest buildings outside the Americas, tripled land values on its river-washed Bund (the International Settlement's downtown) in seven years. Last year, its suburbs full of Japanese soldiers, Shanghai started another and less healthy boom, still booming. Factories, upcountry traders, panicky Chinese moved into the International Settlement for safety. Since no passport control blocks entry to the Settlement, refugees from all the world's political hotspots fled there--Czechs, Poles, German and Austrian Jews. Country View Apartments, aptly named when built before the Japanese invasion, now look on rows of smoking chimneys. The Chinese dollar, worth 30 American cents in 1937, has declined to 7; rents and prices have correspondingly soared.

Beneficiaries of the boom are 1) the foreign sections' 62,000 foreigners in general, whose pounds, francs and dollars have gained purchasing power; 2) 4,000 Americans in particular, who are taking business from the dominant but war-hobbled British. When War began the big Hong Kong and Shanghai Banking Corp., British-controlled, stopped work on a new branch office building. But last week the National City Bank of New York, its one Shanghai branch overflowing with customers, was preparing to open another in the 14-story Cathay Mansions Building. At the Shanghai Club's enormous bar (Noel Coward, squinting down it, once said it showed the curvature of the earth) hard-drinking Shanghailanders tell each other that "This is an American year."

Their chief fear is that it may become a Japanese year. Leaving their rifles outside the International Settlement, the Japanese have long been seeking to control Shanghai's trade by votes. The Shanghai Municipal Council, a true plutocracy, is elected by qualified ratepayers to represent business interests; Japanese businessmen have therefore been moving in, already control more than a third of the ratepayers' votes, may control more by election time in April. Should they unseat the British-American bloc now in command, the wobbly Chinese dollar, hitherto bolstered by British (-L-5,000,000) and American ($25,000,000) loans, might lose exchange value faster still.

Last week the richest man in Shanghai arrived in San Francisco. World-traveling Sir Ellice Victor Sassoon is the Naples-born great-grandson of a Bagdad Jew who moved to Bombay and got rich in the Chinese opium trade. Other famed Sassoons: the late Sir Philip of London, Britain's art-loving ex-Under Secretary of State for Air, and Siegfried of Wiltshire, foxhunting ex-poet. But Cousin Victor of Shanghai is the financial head of the family. Thirteen years ago, fleeing taxes, he transferred some $85,000,000 (Mex.) from British India to free Shanghai, where there is still no income tax. He bought real estate, built the city's biggest buildings, lives in begadgeted Oriental splendor atop his own Cathay Hotel. Lame, cynical, monocled Sir Victor's parties are the gayest in gay Cathay society; his business interests as wide as Shanghai's own. Besides cotton mills, building supplies, tugboats, bus lines, a brewery, a laundry, he owns or manages Shanghai's best hotels, apartments and office buildings, including Cathay Mansions where the National City Bank has just taken new space. But above all Sir Victor is a banker himself. His E. D. Sassoon Banking Co., Ltd., buys and sells currencies on the old Rothschild basis of advance information, refuses to align itself with British, Chinese or American banks in support of the Chinese dollar, takes an impartial trading profit on either side. Money-wise Sir Victor spends about six months a year in Shanghai, three in India (horses, cotton mills), three in Europe and the rest of the world. For tax reasons, his visits to England are carefully spaced. Lately he has upped the frequency of his visits to the U. S., upped his investments here, notably in plastics. More than most Shanghailanders, liquid, diversified Sir Victor dares speak his mind. In San Francisco last week he spoke it on Japanese-American trade relations.

"Japan," said Sir Victor, who plays cards for high stakes, "finds herself in the position of trying to bluff in a poker game with a full house against a royal flush. . . . The U. S. has Japan absolutely cold in these negotiations, and Japanese businessmen know it."

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