Realpolitik

News came from Moscow that an ordinary court of law had annulled the Sakhalin Island concession granted by the Bolshevik Government in 1923 to the Sinclair Consolidated Oil Co. on the ground that the Company had failed to keep its agreements. At Moscow, it was said that the case would not be take to a court of appeal, though a representative of Harry F. Sinclair in the U. S. averred that it would be appealed. The sum of $100,000, paid to the Bolshevik Government as a guarantee of fulfillment, was ordered to be returned.

The terms under which the concession was granted expressly provided that the Sinclair interests should attempt to enlist the cooperation of the U. S. Government. There seems no reason to doubt that the Bolsheviki hoped to force the U. S. to recognize Russia by making it afford the Sinclair Co. protection. No account was taken of the political theory of the U. S. that no private interest can dictate the foreign policy of the Government at Washington.

It was suggested in well-informed circles that the Bolshevik Government annulled the concession on the ground that the U. S. had not been induced to recognize Russia; but, not being willing to cancel the contract on this ground, a technical reason was found. Whatever the cause of the Russian Government's action, it at least provided an object lesson to others of the difficulty of dealing with an unrecognized government.

There remains to be considered the fact that, at the time the Sinclair concession was made, the Bolshevik Government was making recognition overtures to the Japanese Government and that Japanese troops were occupying Northern Sakhalin, which accounted for the inability of the Sinclair interests to work its concession. There is nothing to prove collusion between the Japanese and the Bolsheviki to void the Sinclair concession; but, in the Russo-Japanese treaty (Protocol B., Article 1) signed Jan. 20, 1925, it was expressly provided that Japanese were to receive "concessions for the exploitation of 50% of the area of every oil field in Northern Sakhalin. . . ." This, in effect, annulled half the Sinclair concession. By other terms of the treaty, it was made advantageous for the Bolsheviki to lease the remainder of the concession to the Japanese, who would enjoy the active support of their Government. The cancelation of the Sinclair concession was therefore a logical link in the Bolshevik chain of reasoning.