LONDON — Britain and the Soviet Union resolved a 60-year-old dispute Tuesday by settling financial and property claims that included old czarist bonds that had come to be valued mainly as decorative curiosities.
It was said to be the first time that the Soviet government has agreed to assume a financial obligation remaining from czarist times. After the Bolshevik Revolution in 1917, the Kremlin renounced all pre-revolutionary claims.
Under the terms of the accord, one of three signed by visiting Soviet Foreign Minister Eduard A. Shevardnadze and British Foreign Secretary Geoffrey Howe, Moscow agreed to pay the equivalent of $67.5 million on British citizens' claims that may total as much as 20 times that amount.
In return, the Soviet government agreed to settle Moscow's claim for $3 billion in compensation for British involvement in efforts to overthrow the fledgling Soviet government between 1918 and 1921. The Soviets will receive just under $4 million.
While the sums on both sides constitute only a fraction of the original claims, the fact that they were settled at all is viewed here as a measure of Moscow's interest in repairing damaged relations with Britain.
Britain is regarded as a major factor in Moscow's efforts to improve its ties with Western Europe and ease overall East-West tension in advance of a possible U.S.-Soviet summit conference.
Defection by KGB Chief
The upbeat mood surrounding Shevardnadze's two days of talks with senior British leaders, including two hours with Prime Minister Margaret Thatcher, appears to signal an end to strains that had plagued relations between the two countries since last September. That month the KGB chief in Britain, Oleg Gordievski, defected and set off a series of expulsions and counter-expulsions.
In addition to the claims settlement, Howe and Shevardnadze signed an agreement calling for long-term economic and industrial collaboration and another agreement aimed at preventing naval accidents by improving communications between the Soviet and British navies.
The settlement of the British claims will affect mainly British holders of sterling bonds issued by czarist Russia to finance railroad construction and municipal projects in the 19th Century and Russia's effort in World War I.
The Foreign Office said the majority of the 40,000 British claimants hold bonds that over the years have become worth more as a collectors' item than for their face value.
A total of 46 different Russian issues are still listed on the London Stock Exchange, one of the few Western markets that list the bonds. Most are traded at 1% and 5% of their face value. Some have not changed hands since the late 1960s.
Among the bonds are some issued by St. Petersburg, the czarist capital, which for a brief period was known as Petrograd before the Bolsheviks gave it its present name, Leningrad.
Diana Herzog of the New York firm R.M. Smythe, which deals in so-called collector's securities, said there are thousands of bonds such as the czarist securities, backed by governments that were long ago overtaken by revolution. Most are traded as curiosities or collectors' items since the chance of redemption is extremely slim.
Luke Glass, a spokesman for the London Stock Exchange, said he was aware of only one other instance in which a Communist government has settled such a blanket claim with a Western country. In the 1960s, Romania paid a measure of compensation to British citizens who had invested in the development of Romanian oil fields before World War II.
London dealers familiar with the czarist bonds estimated at $1.5 billion the face value of bonds issued to Britons. He said that many of the certificates had been lost or destroyed over the years.
The London Stock Exchange suspended trading in the bonds Tuesday to prevent speculative trading while the claims are being processed.
According to the terms of the Anglo-Soviet agreement, only those bonds held by British citizens on or before July 14 will be eligible for redemption.
The $67.5 million that will be used to settle the claims is reported to be money deposited by the Baltic governments of Latvia, Estonia and Lithuania in London banks about the time those countries were taken over by the Soviet Union in 1940.