Why is the case important?
The U.S. (P) claim was based on the fact that funds deposited in a U.S. bank by a Russian corporation that had been nationalized by the Soviet government was due to it.
Facts of the case
In 1933, the United States established formal diplomatic relations with the Soviet Union. This case involved a Russian metal works company which had deposited money in an American bank prior to the Russian Revolution of 1917. The Soviet Union nationalized the company and attempted to reclaim its assets with the help of the United States. The bank refused to cooperate, citing protection of a New York law.
Does the national government have complete power in the conduct of international affairs?
(Sutherland, J.). Yes. The states cannot interfere in the complete powers which the national government has in the conduct of international affairs. The U.S. (P) recognized the Soviet government coincidentally with the assignment of all claims. The President does not need the consent of the Senate to conduct foreign relations. In respect of foreign relations generally, state lines disappear. Reversed and remanded.
The United States Supreme Court held that no state policy could prevail against the international compact here involved. The conduct of foreign relations was committed by the U.S. Constitution to the political departments of the government, and the propriety of what could be done in the exercise of this political power was not subject to judicial inquiry or decision. According to the Court, the assignment involved here was within the competence of the President and the external powers of the United States were to be exercised without regard to state laws or policies. Further, the Court averred that while the U.S. Constitution stated that private property could not be taken without just compensation, the Constitution had no extraterritorial operation, unless in respect of U.S. citizens.
- Case Brief: 1937
- Petitioner: United States
- Respondent: Belmont
- Decided by: Hughes Court
Citation: 301 US 324 (1937)
Argued: Mar 4, 1937
Decided: May 3, 1937