26035
STATEMENT OF THE CASE.
ORIGIN OF THE DISPUTED MONEY
[Before July 23, 1912]
The Moscow Social-Democrat Schmidt*, a rather wealthy man, was arrested during the revolution and died in one of
the Moscow prisons. Dying, he bequeathed his fortune to the Bol
sheviks. It goes without saying that this will, made verbally,
had no legal force. Nevertheless, the Schmidt sisters, who
received his inheritance, wanted to dispose of it according to
their brother’s will and gave the money to the Bolsheviks.
The transfer of money can be established based on the follow-
ing facts. One of the sisters, Ekaterina Schmidt (married to
Mr. Andrikanis), disputed the money from the Bolsheviks.
The conflict that arose from this was settled by arbitration,
which was rendered in Paris in 1908 1 with the participation of members of the Socialist-Revolutionary party. Rubano-
vich, who is the representative of this party in the International
Socialist Bureau 2, knows that this decision took place
(Nathanson, one of the most prominent members of the same party, also knows about this). This decision stipulated
that Schmidt's money be transferred to the Bolsheviks. Another Schmidt sister,
Elizaveta Schmidt (married to Mr. Ignatiev), trans- ferred the money to the Bolsheviks without arbitration. In a letter
addressed to Zetkin, she precisely defined her relationship
with the Bolsheviks 3. This letter was handed over to Mr. Ducaux de
la Haille. Elizaveta Schmidt lives abroad and will probably
not refuse to confirm all the facts stated here. However,
one should not forget for a minute that the names of both sisters should
in no case be made public, for because they gave money to the revolutionaries, they could suffer severely
and be subjected to exile to Siberia or even sen- tenced to hard labor. Thus, only on the con-
dition that the fullest secrecy is ensured, Elizaveta
Schmidt will be able to agree to write a letter to a socialist
lawyer.
On what basis do Zetkin and Kautsky, in their letter of
18.XI.11 4, state that the question of ownership of this
money continues to remain disputed?
*
V. I. Lenin everywhere writes the surname of N. P. Schmidt with the letter
"д", while according to the personal documents of Nikolai Pavlovich during his lifetime, it was established that his surname was N. P. Schmit.

This money belonged to the Bolshevik faction, which was part of the RSDLP. Another faction (Mensheviks),
hostile to the Bolsheviks, accused them of using this money in the interests of their faction, and not in the interests
of the party. To this accusation, the Bolsheviks replied that the Mensh-
eviks did the same and that only if between both sides an agreement will be reached on the liquidation
of factions, the annulment of factional coffers and the closure of fac-
tional newspapers, the Bolsheviks will be able to agree to transfer to the party
in the person of its Central Committee the money of their faction.
In January 1910, a plenary session of the Central
Committee of the party was convened. It was at this meeting that
an attempt was made to liquidate factions by means of adopting a mutual obligation.
The Bolsheviks declared that they would transfer their money to the coffers
of the Central Committee only on the indispensable condition
that all factions comply with this obligation, and for control and for making a decision, in case some
factions deviate from the obligation they have assumed, three "holders" or three arbitrators will be appointed, which
amounts to the same thing. This declaration of the Bolsheviks
constitutes an arbitration agreement, which entered into force from the
moment when the three persons named in the preliminary agreement
of the parties as "holders" - Mehring, Kautsky and Zetkin -
agreed to take on these duties 5.
In
case of conflict, the three "holders" were to (see the text of the Bolshevik declaration or the arbitration
agreement) decide definitively whether to return the money to the Bolsheviks or to the Central Committee, that is,
to the entire party as a whole. Consequently, the question continues to remain
disputed as a result of the resignation or rather desertion of the "holders", as a result of their refusal to fulfill
the obligations they assumed. After they themselves have violated their obligations, abused
trust and violated the law (French law categorically prohibits arbitrators from refusing to perform
their duties after they have assumed them), they tried to shift their blame onto others.
What documents establish the fact that the arbi- tration agreement existed, and who are the contracting
parties?
The Bolshevik declaration, published in the Central
Organ of the party "Social-Democrat", is not signed and the "holders"
are not named in it, but the letters of the "holders" addressed to
Lenin fully prove the fact that the arbi-
3*

tration agreement took place. The most important of these letters is
the letter of November 18, 1911 (the translation and the original of which
have been handed over to You). This letter, signed by Zetkin and Kaut-
sky, states definitely that the arbitration agreement was concluded
at the plenary session (that is, discussed at the plenary
session of 1910, because there was no other such session).
Who were the contracting parties?
This is also very clearly stated in the following phrase:
"Lenin's group, on the one hand, and all other groups, repre-
sented at the Plenum or in the Foreign Bureau of the Central
Committee, on the other hand."
In a letter of November 18, 1911, the two former "holders"
repeat three times that the contracting parties are precisely
these. This admission (written) of two "holders" represents
, beyond any possible doubt, legal proof of what the obligations of those, between
whom there is a conflict at the moment, consisted of.
1) The obligation of "Lenin's group" consisted in that they
transfer
[money]* to the "holders" (this obligation was fulfilled, and there are documents that prove this).
2) The obligation of the "holders" consisted in that they
render a final arbitration decision.
The letters of the "holders", in which they inform me that they
are resigning, as well as their letter of November 18, 1911,
constitute documents that prove that this second obligation has not been fulfilled, and the party that
has suffered from this has the right to prosecute in court
those who have not fulfilled their obligations.
Can the former "holders" or rather Zetkin, who received the money, defend themselves by claiming that she
did not know the persons who make up "Lenin's group"?
1)
From a political point of view, this method of defense (which would be a sophism) has become impossible by virtue of the one
fact that Lenin himself is taking all measures to achieve the return of the money to "Lenin's group."
Part of the Bolsheviks, who in January 1910 were part of
the Bolshevik faction, left the latter and formed their
own separate small group 6. This group in June and July
1911 published the points of their differences with Lenin.
Nevertheless, on November 18, 1911, the "holders" continued to speak
only of "Lenin's group" and did not say a word about other
Bolsheviks who claimed that they had the right to the disputed money.
* Words in square brackets have been restored according to meaning.

2) From a legal point of view, the circumstances were such that all communications with the Bolsheviks were carried out through the intermediary of Lenin (Ulyanov). It was to him that the “holders” turned to demand the transfer of money (this letter was given to Mr. Duc de la Haye) “according to his promise” (as stated verbatim in the letter).
It was Lenin whom the “holders” notified of their resignation and of all their decisions.
Thus, it is legally confirmed: 1) that it was Lenin who transferred the money, 2) that initially (before the agreement was concluded) he was their “holder”, 3) that the arbitrators demanded that he fulfill his promise, 4) that it was to him that [they] presented a report on all their steps.
It follows from this that Lenin legally has the right to demand that the money be returned to him. Consequently, if the “holders” had referred to the fact that they did not know who constituted the “Lenin group” (if the “holders” had done this in their letter of November 18, 1911 – but they did n o t d o s o ), then they would have resorted to means of fraud and deceit, for the “holders” assumed the obligations of arbitrators at Lenin’s request, maintained relations only with him, and during the three or four months during which they performed their duties as arbitrators, they never raised the question of who constituted the "Lenin group."
Is it now possible to assess this conflict from a political, rather than a legal, point of view?
Since there were universally recognized arbitrators, an assessment of this conflict from a political point of view was not only possible, but even obligatory. At that time, it was the duty of the arbitrators to consider all political issues, and this is precisely what they did in the period from June to October 1911.
Now, that is, after their resignation, the arbitrators can no longer consider and assess this conflict from a political point of view, for there is no institution that possesses the necessary competence to consider political issues. There is no political institution that possesses the necessary competence to consider the case on its merits.
Now the legal point of view consists solely in the following: did the arbitrators fulfill, yes or no, their obligations to the one who gave them the money?
And now I accuse the arbitrators of not fulfilling their obligations, and this alone constitutes the conflict. Any political point of view has completely disappeared from this conflict.
Every bourgeois court cannot fail to recognize that the arbitrators did not fulfill their duty, that they broke their promise, that they committed a breach of trust, and that they abandoned their post. The intervention of socialist lawyers is the only means to prevent the former "holder" Zetkin from being convicted by bourgeois courts.
Is it possible to attempt to settle this conflict by resorting to a new arbitration court?
Now that nothing more guarantees us that the arbitrators will not again abandon their post, no further arbitration is possible, and therefore I could not agree to any arbitration between me and Zetkin, which, however, no one has even proposed to date.
The intervention of the International Socialist Bureau in this case is impossible, for the Bureau is a political institution of a special kind. My monetary claims against one of the members of one of the parties cannot in any way be subject to consideration by the ISB.
What is the significance of the letter from Zetkin and Kautsky of November 18?
This letter is the most important document in its significance, which irrefutably proves the guilt of Zetkin and all the former “holders”. The analysis of this letter is of cardinal importance for the entire case. This letter states that an arbitration agreement existed. From the very moment of such a statement, it turns out that the arbitration agreement has been violated, for the resignation of the “holders” (stated in this letter) annuls the arbitration agreement not only from the point of view of the laws of the whole world, but also from the point of view of common sense.
In this letter, the “holders” demand that the parties conclude a new agreement!!
The former “holders” want to oblige the parties to "reach an agreement"!! And they demand this after the only possible agreement — the one on the basis of which the parties agreed to submit to the arbitration decision of Kautsky, Zetkin and Mehring — was annulled by the arbitrators themselves. For the situation here is such that it was not the contracting parties who refused to submit to the arbitration decision, but the arbitrators who refused to make such a decision (after they had begun the proceedings). This one letter would be enough to initiate two lawsuits:

against Zetkin (in the case of the return of money) and against the three arbitrators (in the case of damages caused by breach of obligation).
The laws of all civilized countries protect the sanctity, inviolability and independence of every arbitration court and prohibit any interference in the motives that guide the arbitrators, in their considerations of a political order, in their free convictions, etc. But precisely because the law protects the arbitrators, it equally requires the arbitrators to fulfill their duty, that is, to make an arbitration decision. And in the event that the arbitrators completely fail to fulfill this obligation, they are responsible for it.
Having recognized that an agreement existed, having recognized that they resigned, having recognized, finally, that one of the contracting parties was and continued to be the “Lenin group,” the authors of the letter of November 18, 1911, completely proved that they must return the money to the same Lenin who entrusted it to them. It is indisputable, both from a legal and from a moral point of view, that after their resignation the arbitrators must return the money to the party that handed it over to them. And it is equally indisputable that it was the arbitrators who did not fulfill their obligations, they are responsible for this, as well as for the damages caused by this.
II. Lenin
Translated from French
Printed from the text written in I. F. Armand’s handwriting
1 See present collection, p. 36, note 9.
2 The International Socialist Bureau (ISB) – the permanent executive and information body of the Second International.
I. A. Rubanovich – one of the leaders of the Socialist-Revolutionary Party. Member of the International Socialist Bureau. During the world imperialist war – a social-chauvinist. After the October Socialist Revolution – an opponent of Soviet power.
3 The reference is apparently to the letter from El. P. Schmidt to K. Zetkin of November 23 (N.S.) 1911 (see present collection, p. 56, note 6).
4 See present collection, p. 50, note 5.
5 The reference is to the “Declaration of the Bolsheviks,” which was included in the resolution of the January Plenum of the Central Committee of the RSDLP in 1910 “On Factional Centers” (see “The CPSU in Resolutions and Decisions of Congresses, Conferences and Plenums of the Central Committee,” 1970, vol. 1, pp. 296-298).
6 The reference is apparently to a group of Bolshevik conciliators (see V. I. Lenin. “On a New Faction of Conciliators or Virtuous Ones.” Collected Works, vol. 20, pp. 334-354).