The New York herald., 1921-08-06
Legal Status Of the Soviet.

A recent decision by the Chancery
division of the British courts that
the Imperial Russian gold reserves
seized by the Soviet II sent to
England could not be attached In
respect of obligations Of former Rus
sian governments marks another OF
the steps by which the Russian Soviet
through the British courts is fortify-
ing its international status and the
legality Of It's confiscatory acts and
DEGREES in the past.
1t would be fruitless to impute to
British courts any but the strictest
legal motives, but the fact remains
that the decision in this the so-called
gold test case and the similar de-
cision in May Of the British Court
Of Appeals in the A. M. Luther case
throw the whole benefit OF the doubt
on the side of the present Soviet
Government in Russia.
The Luther case arose out Of the
confiscation by the Soviet Govern
ment Of certain veneers owned by the
Luther firm OF Reval, Esthonia. The
veneers were subsequently shipped to
England, and the Luther firm brought
suit in the British courts to recover
It's stolen or appropriated property
from the British purchaser. The
British High Court gave a decision
prior to the conclusion of the Anglo
Russian trade agreement, and in this
decision the Luther firm was rein
stated In ownership OF the veneers.
Before the decision Of the Court OF
Appeals, now under review by the
House Of Lords. had been rendered,
however, the trade pact was signed.
The trade agreement specifically pro-
vides in Paragraph 2 Of Article I.
as follows.
Nothing in this article shall be
construed as overriding the provi-
sions OF any general international
convention which is binding on either
party by which the trade in any
particular article Is or may be regu-
lated Gas, for example, the opium
convention)."
This paragraph might easily have
been interpreted as guaranteeing
property rights, for these are the
commonest OF international conven-
tions. But the Court of Appeals re-
versed the decision OF the High Court
in the Luther case and confirmed the
validity OF Soviet ownership OF the
confiscated veneers. 1t took the
stand that the High Court had ruled
before the Soviet regime had been
recognized as the de facto govern
ment OF Russia. Such recognition,
which was bestowed in the trade
agreement, precluded England from
interfering with the acts of the So
Wet Government unless property con.
fiscated could clearly be identified az
British.
In the gold test case Article TX. of
the trade agreement provides:
"The British Government declares
that II will not initiate any steps
with a view to attach or to take
possession Of any gold, funds. securi-
ties or commodities not being articles
identinable as the property Of the
British Government which may be
exported from Russia In payment for
imports or as security for such pay
ment, or Of any movable or immov-
able property which may be acquired
by the Russian Soviet Government
within the United Kingdom. 1t will
not take steps to obtain any special
legislation not applicable to other
countries against tho importation
into the United Kingdom OF precious
metals from Russia, whether specie
(other than British or allled) or bull
lion or manufactures, or the storing,
analyzing, refining. melting, mort
gaginR or dlspOsing tnereOr IN the
United Kingdom. and will not requi-
stlon such metals"
The British court might have taken
the logical view that the trade treaty
must conform to British laws and
customs, which above everything
else guarantee explicitly the integ-
rity OF private property rights. But
the court adopted the opposite view
that British laws and customs relat-
ing to conflscation are subordinate