Dictionary of National Biography, 1927 supplement/Cassel, Ernest Joseph

CASSEL, Sir ERNEST JOSEPH (1852-1921), financier and philanthropist, born at Cologne 3 March 1852, was of Jewish descent, the youngest of the three children of Jacob Cassel (died 1875) by his wife, Amalia Rosenheim (died 1874). Jacob Cassel had a small banking business in Cologne which yielded a moderate competence. His elder son Max (born 1848) died in 1875. Ernest was educated in Cologne for a business career. He left school at fourteen to start work with the banking firm of Eltzbacher; but in January 1869 he went to Liverpool and entered the office of Blessig, Braun, & Co. Here he remained till April 1870, when he obtained a clerkship in the Anglo-Egyptian Bank at Paris. On the outbreak of the Franco-German War he was obliged, being a German subject, to leave Paris. He returned to England with an introduction to the financial house of Bischoffsheim and Goldschmidt (in London), which was interested in the Franco-Egyptian Bank.

In the service of this house the foundations of Cassel’s immense fortune were laid with amazing rapidity. Engaged at a salary of £200, he soon gave such evidence of a remarkable aptitude for finance that he obtained early promotion. In 1874, at the age of twenty-two, he was appointed manager at £5,000 a year. The firm, in conjunction with various foreign associates, had incurred heavy commitments in America and elsewhere, out of which had arisen at this period certain claims and lawsuits. Cassel was entrusted with the negotiations for settlement, and it was arranged that he should participate in the amounts recovered. His success in this work, and notably in the disentanglement of the affairs of the New York, Pennsylvania, and Ohio Railway, resulted in substantial additions to his emoluments. Moreover, in the course of his visits to New York, he formed an intimate friendship with Jacob H. Schiff, of the banking house of Kuhn, Loeb, & Co., through whom he became profitably interested on his own account in other American enterprises.

Thus Cassel was already in flourishing circumstances in 1878, when he married Annette, daughter of Robert Thompson Maxwell, of Croft House, Croft, Darlington. On the day of his marriage he became a British subject by legal naturalization. A happy married life was cut short by the early death of Mrs. Cassel three years later. She was a convert to the Church of Rome; and, by her dying wish, Cassel himself was soon afterwards received into the Church of Rome, though the fact was not generally known till his own death. Their only daughter married in 1901 Lieutenant-Colonel Wilfrid W. Ashley; she died in 1911.

By the time of his wife’s death Cassel had already accumulated a capital of £150,000; and in the next fifteen years the increasing magnitude of his operations made him one of the wealthiest and most powerful financiers in the city of London, where his high reputation for integrity and sureness of judgement, particularly in the placing of foreign issues, inspired the utmost confidence. He remained associated with the Bischoffsheim firm, though he was never made a partner, till 1884; and even then, though he began to undertake business independently, he continued to occupy part of their office in Throgmorton Street. It was not till 1898 that he took premises of his own at 21 Old Broad Street. These were his business head-quarters until the end of 1910, when he retired from active work in the City; he then purchased 51 Green Street, Grosvenor Square, from which address his affairs were subsequently administered.

While still with the Bischoffsheim firm Cassel showed great far-sightedness in connexion with what appeared to be a losing venture which the firm had made in financing the Swedish Central Railway in the early ’seventies. This railway connected the port of Oxelösund with the phosphoric iron-ore mines of the Grängesberg district. The working of these mines proved unremunerative; and Cassel realized that the success of the railway depended on its obtaining a larger revenue from the conveyance of iron ore. When Sidney Gilchrist Thomas [q.v.] and Percy Carlyle Gilchrist made known in 1878 their new basic process for the conversion of phosphoric iron ores, which in England was generally disregarded, he took a keen interest from the first in the possibility of its application to the product of the Swedish mines. Through him the Thomas-Gilchrist process, which was eventually taken up in Germany, was introduced into Sweden with highly successful results. The mines and the railway (of which Cassel became a director in 1885) were turned into profitable concerns; and this led to a considerable enlargement of Cassel’s field of enterprise in Sweden. More mines were acquired, new railways were created, and large interests in docks and shipping rounded off an extensive business from which ultimately Cassel derived a substantial part of his wealth. In 1894 he acquired a large interest in the Swedish Association, Ltd., which had a considerable holding in these concerns; and in 1896 he took part in the formation of the Grängesberg-Oxelösund Traffic Company which incorporated them.

Among the other important operations undertaken by Cassel when he had become independent of the Bischoffsheim house in 1884, one of the first was the reorganization of the Louisville and Nashville Railway in America. This he carried through successfully in conjunction with Kuhn, Loeb, & Co., of New York, and Wertheim and Gompertz of Amsterdam. He also became interested in the Mexican Central Railway, and arranged its finances throughout a considerable period; and in this connexion he subsequently formed (in 1899) the Mexican Central Railway Securities Company, Ltd., for receiving deposits of the consolidated mortgage bonds of the railway and thus securing a position of influence over the American company by a preponderating holding of the bonds. In 1893 he issued the Mexican government 6 per cent. loan; in 1895 the Chinese government 6 per cent. loan; and in 1896 the Uruguay government 5 per cent. loan. At home he took a leading part in the financing of the Electric Traction Company, Ltd., formed in 1894, which in 1895 underwrote the construction of the Central London Railway, opened in 1900. In 1897 he was instrumental in purchasing the Barrow Naval and Shipbuilding Construction Company for amalgamation with Vickers, Sons and Company, and, after the amalgamation of the Maxim Gun and Nordenfelt companies, in acquiring them also for Vickers. For some years thereafter he underwrote the chief financial issues for the Vickers Company and its subsidiaries.

From early years Cassel had been interested in Egyptian affairs, and in 1898 he cemented a very important connexion with Egypt by financing the construction of the great Nile dams at Assuan and Assiut through the formation of the Irrigation Investment Corporation. He was subsequently prime mover in the formation of the National Bank of Egypt; of the Daira Sanieh Company, which purchased the Daira Sanieh estates from the Egyptian government; of the Agricultural Bank of Egypt; of the Daira Sanieh Sugar Corporation, which purchased from the Daira Sanieh Company certain sugar factories, 292 miles of railway with rolling-stock, and the benefit of contracts with the Egyptian government; of the Société Anonyme de Wadi Kom Ombo, for the development by irrigation of the great desert plain extending from the Nile to Gebel Silsileh—a daring enterprise, the later success of which, with all its benefits to the native cultivators, was another typical proof of Cassel’s farsightedness; and in 1908 of the Mortgage Company of Egypt, Ltd. In 1906 the State Bank of Morocco, and in 1909 the National Bank of Turkey, were created under his auspices; in both these cases, as indeed in some others concerned with international finance, he was acting under unofficial encouragement from the government, in British national interests.

The first public recognition of Cassel’s importance in the financial world was the K.C.M.G. conferred on him by Queen Victoria in 1899; under King Edward he received the further distinctions of K.C.V.O. (1902), a privy councillorship (1902), G.C.M.G. (1905), G.C.V.O. (1906), and G.C.B. (1909). He was also the recipient of various foreign decorations; commander, first class, of the royal order of Vasa, Sweden (1900); grand cordon of the imperial Ottoman Order of the Osmanieh (conferred by the khedive of Egypt, in 1908); commander of the French legion of honour (1906); Crown of Prussia, first class (1908); grand cross of the Polar Star, Sweden (1909); order of the Rising Sun, first class, Japan (1911); and Red Eagle of Prussia, first class, with brilliants (1913).

Though in private life there was an. element of stoicism in Cassel’s character, shown in his personal abstemiousness and in an habitual reticence and reserve which made him somewhat of a mystery to the public, he kept house on the scale of his abundant means, and enjoyed offering hospitality to his acquaintances. From 1879 to 1889 his London residence was 2 Orme Square, Bayswater; from 1889 to 1908, 48 Grosvenor Square; and in 1905 he bought Brook House, Park Lane, to which he moved in 1908. He purchased the estates of Moulton Paddocks, Newmarket (1899, adding thereto in 1908, 1914, and 1920); Six Mile Bottom, Cambridge (1912); Branksome Dene, Bournemouth (1913); and Upper Hare Park, Cambridge (1917). He was a collector of old masters, old French and English furniture and objets d’art, including valuable examples of Renaissance bronzes, Dresden china, and Chinese jades. His pictures comprised important works by Van Dyck, Franz Hals, Romney, Raeburn, Reynolds, and Murillo. Among his fine collection of old English silver were such unique historical pieces as the ‘Bacon cup’ of 1573-1574 and the ‘Blacksmith’s cup’ of 1655-1656. From early life he was a fearless rider and devoted to hunting, and his interest in horses resulted, in 1889, in his forming a stud for breeding, jointly with Lord Willoughby de Broke. This arrangement continued till 1894, when the partnership ceased and Cassel carried on the stud on his own account. Among the chief stallions owned by him were ‘Cylgad’ and ‘Hapsburg’, and among his chief mares ‘Gadfly’, ‘Sonatura’, and ‘Doctrine’. In 1896 he began racing his own horses, and in later years had a fair number of successes on the turf, though he got no nearer to winning the Derby than second with ‘Hapsburg’ in 1914.

It was at race-meetings that he became acquainted with King Edward VII, then still Prince of Wales, and a close friendship was formed. The King, both before and after he came to the throne, held Cassel in high esteem, readily accepting his hospitality and enjoying his society at Newmarket and elsewhere, while Cassel admired and respected his royal friend, to whom in personal appearance he bore a noticeable resemblance. Some of the greatest of Cassel’s public benefactions were made in honour of, or in memory of, King Edward. Contemporary gossip credited Cassel with loans or gifts of money to the King. There was no foundation for any such legends; what is true is that the King most sensibly sought, and availed himself of, Cassel’s opinion about his own private money matters, and he could not have gone to a sounder or a more straightforward adviser.

Shortly after the outbreak of the European War in 1914, when anti-German feeling was acute in England, an agitation was set on foot by extremists, who were blind to Cassel’s unsullied British patriotism, to have his name removed from the Privy Council; but they were deservedly frustrated. He was in fact a most valuable counsellor to the government on the financial problems arising out of the crisis; he was one of the largest individual subscribers to the successive war loans, and in September 1915 he went over to New York specially in order to use his influence there in support of the issue of the Anglo-French loan in America. Cassel died at Brook House 21 September 1921, and was buried according to the rites of the Church of Rome, at Kensal Green. His estate was proved at £7,551,608 (net personalty, £7,329,033).

As a public benefactor during his lifetime Cassel gave away altogether about £2,000,000. His most important charitable and philanthropic gifts were the following: In 1902 he gave £200,000 for founding the King Edward VII Sanatorium for Consumption, Midhurst; in 1903, £41,000 for the Egyptian Travelling Ophthalmic Hospital; in 1907, £10,000 for the Imperial College of Science and Technology; in 1909 and after, £46,000 as his half-share in founding (with Viscount Iveagh) the Radium Institute; in 1911, £210,000 for creating the King Edward VII British-German Foundation (half for relief of distressed English in Germany, and half for distressed Germans in England); £30,000 for the benefit of workmen at Kizuna and Malmberget mines in Sweden, and £50,000 (in memory of his daughter, Mrs. Ashley) to hospitals and King Edward’s Hospital Fund; in 1912, £10,000 for the Deaconesses’ Hospital, Alexandria;. in 1913, a further £20,000 for the King Edward Sanatorium, and £50,000 for relief of sick and needy in Cologne; during the war years, £114,000 to the Red Cross, £48,000 to hospitals, £12,000 for a convalescent home for officers at Sandacres, and £222,000 in donations to the National Relief Fund, Officers’ Families Fund, Salvation Army, Church Army, Young Men’s Christian Association, &c.; in 1919, £472,000 (in securities of £500,000 face value) for creating an educational trust, to be applied by the trustees (Viscount Haldane, the Earl of Oxford and Asquith, the Earl of Balfour, Mr. H. A. L. Fisher, Sir George H. Murray, Mr. Sidney Webb, and Miss Fawcett) to objects generally indicated in the trust-deed (establishment of a faculty of commerce in London University; support of the Workers’ Educational Association; scholarships for technical and commercial education of workmen; promotion of the study of foreign languages by professorships, lectureships, or scholarships; endowments for the higher education of women, and £212,000 for founding a hospital for functional nervous disorders at Penshurst, Kent.

Portraits of Cassel were painted by P. A. de Laszló in 1900, and by A. L. Zorn in 1907.

[Private information; personal knowledge.]

H. Ch.