LENA GOLDFIELDS

Manawatu Standard, Volume LIV, Issue 290, 5 November 1934, Page 7

LENA GOLDFIELDS

LONG DISPUTE SETTLED

PAYMENT BY SOVIET,

COMPROMISE REACHED

(United Press Association —By Electric Telegraph.—Copyright.) Received November 5, 11.35 a.m. MOSCOW; Nov. 4.

An agreement settling the Lena goldfields dispute has been signed on belialf> of the Soviet and the Lena Goldfields Company. The price is believed to be between £2,000,000 and £3,000,000. The Soviet had cancelled the company’s mining concessions, alleging a breach of contract. The company referred the issue to arbitration in England and was awarded £13,000,000, which the Soviet declined to pay, offering £1,u00,000, whereas the company asked for a minimum of £3,500,000.

The Lena company is an old-estab-lished concern with long experience in the working of mining properties. Under the old regime in Russia it had large interests in the territories that were the subject of the 1925 agreement ; and for a time it was able, in spite of the obstacles raised by the Government, to make The profits in the first three’ years amounted to about £750,000. The company invested nearly £3,500,000 in development in the four and a. half years from August, 1925 instead of the 22,000,000 roubles—£2,22s,ooo, at the Soviet Government’s fictitious valuation —which it had undertaken to invest in seven years. It installed the finest modern plant, and, until it was prevented by the Soviet Government, it more than carried out its part of the bargain. But with the adoption of the “Five Year Plan” it was treated ns a “capitalist outcast.” The promised open markets ceased to exist. It could buy only from the Government and sell only to the Government, who paid fox the gold at their own fanciful valuation of the rouble and so robbed the company of—at a very moderate estimate —£1,000,000. The company’s right to sell gold freely was effectively nullified by the Government’s decree that the buyer would be shot. Between 30 and 40 per cent, of the gold was being stolen, but the Government would take no steps to prevent this abuse. Finally the familiar cry of “espionage” was raised. The company’s premises were raided, and many of its employees were arrested and “tried” according to the well-known- Soviet legal maxim that “law courts are organs for disposing of the enemies of the revolution.” The raids also provided the Bolshevists with technical information of inestimable value if the company were to bo forced out.