further bars by the widening of the river bed, it would be indispensable to plant willows on the banks, which, according to an approximate calculation, reckoning the height of the embankments at 2 fathoms, would not cost more than 12,000,000 rubles ($6,000,000). The cost of the whole undertaking would not exceed 41,600,000 rubles ($20,800,000), and Engineer Poletaeff undertakes to accomplish it within ten years.

Moscow, June 13, 1899.

THOMAS SMITH,

Consul.

TRADE OPENINGS IN RUSSIA.

The last pamphlet (June, 1899) published by the Chamber of Commerce at Frankfort contains the following:

NEW RUSSIAN MONTHLY MAGAZINE FOR TRADE AND INDUSTRY.

For the purpose of fostering German trade relations with Russia, an illustrated monthly publication has just been founded in St. Petersburg, to bring to the attention of Russian merchants and consumers the names of German sources of supply and manufacturing firms. This enterprise promises to be advantageous to the German export trade, and is especially opportune, because a monthly magazine-the Russian-English Messenger-has been published in Moscow in the interest of English trade since November, 1898.

For the last five years, our National Association of Manufacturers in the United States and other trade associations, steamship and transportation lines have directed their efforts towards increasing our trade with Latin America. While I indorse all attempts to increase our exports, I believe that an equal amount of money, time, and energy expended upon furthering our trade relations with the great Russian Empire would prove more profitable.

Russia has not only an immensely larger population than Latin America, thus affording us a wider market, but the vast Empire offers the best and most profitable field for our promoters of railway, electric, and other enterprises, for the construction of waterworks and drainage systems, building streets and canals, works in iron, making dry docks and harbors, and opening mines. Americans have the most favorable chances to employ their capital and skill in Russia, as the people of that country are rather jealous of Europeans who figure in the rôle of pioneers, whereas they have no fear of American assistance in developing the resources of their country.

I would recommend my countrymen to "go east" and employ their talent, time, money, and energy in Russia, which will return them ample compensation.

FRANKFORT, June 20, 1899.

SIMON W. HANAUER,

Vice-Consul-General.

LEGAL STATUS OF FOREIGN CORPORATIONS IN RUSSIA.

I send herewith a translation of a brochure compiled by Mr. Joseph Pergamainte, a lawyer of Odessa, upon the status of foreign corporations in Russia. It will be of considerable value to manufacturing companies in the United States who may be engaged in the Russian trade and also to business men who contemplate putting money in Russian projects.

Millions of dollars have been invested within the past few years in industrial and mining enterprises in Russia, chiefly by the French and Belgians. The Germans are also represented.

ODESSA, February 10, 1899.*

THOS. E. HEENAN,

Consul.

FOREIGN CORPORATIONS IN RUSSIA.

In view of the capacity of stock companies, or anonymous associations, for attracting large capital, they seem destined to play a most important part in develping the latent industry and commerce of modern times. As a natural consequence, the question presents itself of their legal status in foreign countries and the means afforded them to protect their interests in courts of law.

A résumé of their status in Russia and of the laws in force affecting them is given below.

A "foreign company," in the sense of the Russian code, is a company whose center of activity is abroad or whose board of directors or council of administration resides abroad. Consequently, if Russian subjects, in view of escaping the difficulties incident to the establishment of a company in Russia, should organize a company abroad and then return to Russia to engage actively in business, such a company would not be considered a "foreign company." Moreover, by virtue of article 1529 of the civil code, it would not be considered as having any legal status, and in consequence could not plead in a court of law. Nor are those companies considered foreign which, although founded by aliens, have for their object the exploitation of Russian forests, coal or iron mines, etc., for these societies must be founded according to Russian laws and thus become Russian companies, even if their capital and board of directors are foreign. But a company whose council of administration resides abroad and which has only branch offices for local operations is considered a foreign company. Hence it is this class of corporations which will form the subject of this sketch.

According to the general principles of private international rights, the fact of the legal constitution of a corporation in its own country would seem to make it capable of acting in all countries; and this would seem to be in accordance with article 464 of the Russian civil code of procedure and article 242 of the commercial

* Publication of this report has been delayed because of its length and the fact that it contained many details which were of no special interest to manufacturers or exporters in the United States. It has been summarized in the Bureau of Foreign Commerce.

+ The civil code forms the first part of volume 10 of Svod Zakonow of the Empire.

code:* by virtue of which all acts duly legalized abroad are lawful and valid in Russia, even if they do not conform to Russian laws. But such is not the case in Russia. The question is complicated by the fact that the organization of such commercial companies still depends, in certain countries, on the sanction of the government, whereas other countries allow a freedom of organization conditioned only upon the observation of certain legal formalities and prescriptions. In those countries where the sanction of the government is required, the business capacity of foreign companies is, as a general rule, not recognized. This is the case in Russia. To support this solution, it is argued that the authorization of the government constitutes a guaranty for the public good, which can not be made dependent on foreign administration, nor can it be made to suffer from it; and it would be strange indeed to accord rights to foreigners which Russian subjects can not enjoy. Hence, if foreign societies desire legal recognition in Russia, they can obtain it only by virtue of special international conventions, treaties, or declarations concluded between Russia and the governments under whose laws they are incorporated. Therefore, no company organized in a country with which Russia has no special treaty or convention has any legal rights in Russia. This has been affirmed by the supreme court.‡

In regard to the status of those companies whose governments have made special treaties with Russia, two questions arise:

(1) Concerning their right to plead in a Russian court of justice.

(2) Concerning their right to practise their trade or industry in Russia.

It will hereafter appear that no corporation can do business in Russia until it has complied with certain general conditions prescribed by the Russian Government, so that no foreign company can claim a right to operate in Russia merely by virtue of treaty stipulations.

(1) According to the terms of article 2139 of the Russian civil laws, the French companies and other commercial, industrial, and financial associations founded in France and called limited companies can enjoy their full rights in Russia, including that of pleading in a court of justice, upon the condition that they conform to all the laws of the Empire. Stock companies and other commercial, industrial, and financial associations founded in Belgium, with the permission of the Government of that country, can enjoy their full rights in Russia, including the right of pleading in courts of justice, provided they conform to all the laws of the Empire, and provided that similar companies founded in Russia are admitted to enjoy the same rights in Belgium. The ministers of Foreign Affairs and Finances have the right to conclude identical conventions with other foreign powers, without being obliged to obtain permission each time from the Council of State.

The law just quoted is based upon the decisions of the Council of State and sanctioned by His Majesty the Emperor on the 9th of September, 1863, and on the 18th of November, 1865. The first of these decisions refers to the French and the second to the Belgian companies, both having established conditions of reciprocity.

By virtue of the decision of November 18, 1865, conventions have also been concluded by Russia with Italy, Austria, Germany, Greece, and Bulgaria, reciprocity being one of the conditions.

Since by the Russian laws applicable to the creation of corporations or other commercial companies,§ no anonymous society or stock company may be created

* Second part of volume 11 of the Svod Zakonow.

+ It is only necessary for the legation or consulate to certify to the fact that the act is in conformity with the laws of the country.

Order of the Cour de Cassation of 1883, No. 44.

§ Svod Zakonow, volume 10, part 1, articles 2139-2198.

nor carry on its operations in Russia without an authorization of the supreme power and without a previous examination of its statutes by the competent ministry and by the Committee of Ministers or the Imperial Council, no anonymous society or stock company legally constituted abroad can exercise its operations in Russia without submitting to the regulations prescribed for similar Russian societies and companies.

Owing to the differences in the text of the various treaties which have been concluded, there was some controversy in former years in regard to the specific privileges conferred by such treaties upon the various companies. To eliminate all misunderstandings, the law of November 9, 1887, declares that foreign companies shall be able to begin their operations in Russia only after they shall have obtained special permission from the Council of Ministers or the Imperial Council of State, and upon the condition that they conform to certain prescriptions or ordinances, the nature of which varies according to the kind of business which these companies propose to undertake.

Therefore, companies which are organized under the laws of Germany, Austria, Belgium, France, Greece, Italy, and Bulgaria are the only ones which have the actual right to plead in Russian courts of justice, and these companies must be established according to the laws of their respective countries. Contracts made in Russia with parties having the right of access to tribunals will be judged according to Russian laws; but questions of internal administration and conflicts between Russian shareholders and the foreign company will be judged by the Russian courts according to the laws of the country whence the company originated. Foreign companies legally constituted in their own countries have the right to carry on their industry or commerce in Russia only after they have been duly and legally recognized, because no foreign company can have a legal existence in Russia except by virtue of an act of the Russian sovereignty.

According to the civil laws of Russia (articles 2139-2198), no shareholding or stock company can be founded in Russia, nor transact business therein, without a special authorization, which is accorded after a study of the by-laws of the company by the minister competent in such cases, who submits the by-laws, after revision and correction, either to the Committee of Ministers, if simple confirmation is sought for, or to the Imperial State Council, if the company asks for special privileges (articles 2140 and 2196). The Committee of Ministers or Council asks the imperial sanction to the by-laws. When this has been obtained, they are printed in the Official Bulletin of the Laws and Decrees of the Empire and thus receive the full force and effect of a special law.

The same course must be followed by a foreign company in order to obtain recognition, with a few modifications, promulgated by the Ministry of Finances on the 18th of November, 1887, in order to accelerate the procedure. According to this regulation, the foreign companies must address themselves to the above-named ministry and deposit or present a petition accompanied by the following documents duly legalized and translated into Russian:

(a) The statutes or by-laws of the company duly approved abroad and legalized by a Russian consul, in which the latter attests that the by-laws are duly drawn up according to the laws of that country.

(¿) A power of attorney given by the company to its authorized representative in Russia, conferring upon him the right to petition for the said company in Russia.

(c) The accounts and balance sheet of the company for the last five preceding years, duly approved by the general meeting of the shareholders, as well as the distribution of its profits and the amount of dividends paid out for each share or title.

The Russian Government retains its entire liberty of action in the choice of the conditions which it may choose to impose upon a foreign company seeking to establish itself in Russia. There are, however, certain prescribed conditions which must be fulfilled by all companies. These are:

(1) The nomination or appointment of a general representative in Russia. (2) The choosing of a domicile in Russia.

(3) Submission to the jurisdiction of all Russian tribunals.

(4) The observance of all Russian laws, and particularly of all special police regulations or ordinances regarding the industry carried on by the company.

(5) The payment of taxes (an annual tax of from 1,000 to 1,500 rubles by the representative of the company to the first merchants' guild and a tax of 5 per cent on the gross revenue of the company, deduction being first made of the amount placed).

(6) The interdiction against acquiring real estate within the western zone of the Empire and a promise to withhold from taking part in the formation of certain companies. (Imperial ukase of March 14, 1887. The navigation companies on the Caspian Sea can only be in the hands of Russian subjects, and its shares can not be sold to foreigners. Companies intending to exploit petroleum fields are subject to special laws and regulations, and must obtain authorization from the Ministry of Agriculture and of Public Domains, with the sanction of the Ministry of the Interior, the Ministry of Finances, and the chief of the administration in the Caucasus.)

(7) Acquiescence in the revocation of the governmental authorization, in the event of such revocation. (So far, a case of revocation has not yet presented itself. The ministry favors placing in the by-laws of a foreign company a clause authorizing it to merge its business with a Russian company. This clause is of special value, for if extraordinary events should cause the Government to want to revoke its authorization, it would first invite those companies whose by-laws have that clause to submit to the full extent of the Russian law, and companies whose bylaws contain this clause would thus find no difficulty in submitting themselves to the change.)

(8) The deposition of the yearly balance sheet.

(9) The publication in the Russian journals of the dates of the general meetings. (10) The interdiction against changing the by-laws (without authorization). (11) The interdiction against uniting with another company without special permission.

(12) The deposit of a special sum in the imperial bank. This is exclusively for insurance companies. The sum is 500,000 rubles ($257,000) in cash or public bonds. The special conditions for insurance companies were published in the Official Messenger of October 9, 1888.

Acquisition by foreign subjects of real property in Russia.*

ARTICLE 1. In the ten provinces of the Kingdom of Poland, as well as in the provinces of Bessarabia, Vilna, Vitebsk, Volhynia, Grodno, Kief, Kovno, Kurland, Livonia, Minsk, and Podolia, foreign subjects can acquire no right of ownership whatever in immovable property, nor any right of usufruct in immovable property independent of the right of ownership in general and arising from a lease, outside the ports and the towns, with the exceptions of the cases mentioned in article 3 below.

NOTE. The restrictions of the rights of foreign subjects, established by article 1, relative to the possession and usufruct of immovable property situated outside

* Code of law, volume 9, appendix to article 1003, note 2.