Latvia was declared as independent Republic on 18 November 1918, actually in the midst of a lengthy process of political and military encounters of several powers pursuing entirely different goals. WWI began for Latvia in mid-1915 and ended with the withdrawal of the Soviet Latvian forces in early 1920. The changes of administrations of the country and parts of it were as numerous as hardly anywhere in the world. Latvia enjoyed a short period of peace till 17 June 1940, when the Soviet power was re-established in Latvia according with the pact Molotov - Ribbentrop signed in August 1939 to divide spheres of influence between Stalin's and Hitler's empires, until the Germans occupied it in July 1941 in the course of WWII, and then surrendered on 9 May 1945.

Currencies which were legal tender in Latvia:

• Russia, R.S.F.S.R., USSR
• Imperial Russian Rubles
• Russian postage stamp tokens
• Kerenski (Dome) money, Rubles
• R.S.F.S.R. banknotes, Rubles
• USSR banknotes - Chervonets, Rubles, Kopecks
• Imperial Germany
• Reichsmark prior and during WWI
• Darlehnkassenschein Ost Posen 1926, Ostmark
• Darlehnkassenschein Ost Kowno 1918, Ost - Rubel
• Generalkommando Ob,-Ost 1916, 1, 2, 3 Kopecks, iron coins
• Municipal credit notes of Libau, Windau, Mitau, Rubel and Mark
• Reichsmark used in Germany before and during WWII
• Kreditkassenschein Ost-Mark (Reichsmark) for occupied territories
• Republic of Latvia
• Latvian Rubles - Ulmanis (national Government)
• German installed temporary government of Niedra, Latvian Rubles
• Municipal credit notes of Riga, 1919, Latvian Rubles
• New currency "Lat" and "Santim", and temporarily "Latvian Francs" (known use - for revenue stamps, NOT in paper money or coins)
• Soviet Latvian Republic (1919)
• Rubles of Riga Workers Deputy Council (were used in 1920 for printing Latvian postage stamps)
• Municipal credit notes of Cesis (pronounced as: Tsesis), Rubles
• Awalow - Bermondt
• 1, 5 and 10 Mark printed in Yelgava (were used in 1920 for printing Latvian postage stamps)
• 50 Mark, printed in Berlin, not used in Latvia

Many of the Russian and Latvian banknotes were designed by the Latvian graphic arts professor R.Zarrinsch (1869 - 1939), who was director of the government printing works of St.Petersburg in Russia, and subsequently of Latvia, in Riga.

For more than two centuries the territory to become Latvia was an internal part of the Russian Empire, and in 1918 the Latvian Republic was formed from the Russian provinces (Russian: gubernia) of Courland (Latvian: Kurzeme), the southern part of Estonia (Latvian: Igaunija), and the western part of the Russian Vitebsk Gubernia, which became the Latvian province of Latgale. The Baltic provinces enjoyed a limited amount of cultural and political self administration, but not in postal or financial matters.

28.12.1918 - Latvian government issued order that "in all payments, except railroads, the legal tender are Russian czar's, eastern (ost) and Russian Dome (except Kerenski notes of 20 and 40 Rbl.) with exchange rates: 1 Czar's Ruble = 100 Ost-Kopeken = 1 Ruble 15 Kopeks in Dome notes". During this rule the following currencies of Russian Czar Nocolas II were in circulation:

6 copper coins: 1/4, 1/2, 1, 2, 3, 5 Kop.;

7 silver coins: 5, 10, 15, 20, 25, 50 Kop.;

2 gold coins: 5, 10 Rubles;

paper money: 1, 3, 5, 10,25, 50, 100, 500 Rubles (Pick ##: Russia 1, 8 - 15).

Long after these coins and notes ceased to be a legal tender, but unofficially did not lose their value for various reasons: people used them and trusted them more than any doubtful new creation as they symbolized the might of the powerful Russian Empire. The gold coins were the things of permanent value and power and were carried by Latvian refugees after WW I and WW II in Western Europe.

Due to the shortage of coins and the mania for hoarding them soon after the outbreak of WW I, change became very rare. The Imperial Russian Ministry of Finances made arrangements with the Post and Telegraph Department to use Romanov 300 year memorial stamp dies also for printing them as "currency tokens". These differed from postage stamps in such a way, that they had or may also have not had overprints, repeating the value, and no means of were surcharged. Beside they said that they were usable in place of copper coins. They were printed on cardboard paper, without glue, and also these currency tokens were strictly considered as money, their application as postal stamps was not rare.

It appears that the denominations of 1, 2, 3, 10, 15 and 20 Kopecks (Pick ##: 16 - 23) were printed all together in the middle of 1915. However, at the end of September 1915 only the higher three denominations were issued for public use, and the rest stockpiled - probably because of the general currency situation that the lower values were already in little demand.

The first issue (10, 15 and 20 Kop.: Pick ##: 21, 22, 23) with the obverse side did not differ from regular Romanov series stamps. But the reverse side did not have a glue and had the inscription: coat of arms with a note that the value of this token is equal to the respective coin in silver.

The second issue of January 1917 (1, 2 and 3 Kop.: Pick ##: 32, 33, 34) had on the reverse a new text: the value of the token is equal to the respective coin in copper. On the obverse side the 1 Kop. and 2 Kop. tokens had overprinted the value in large size numerals.

Soon after the introduction of the currency tokens paper Kopecks were introduced which had the appearance like regular banknotes. In 1919 they were mentioned in Latvian Government announcements, which shows that were in circulation in Latvia as legal tender. The 1, 2, 3, and 5 Kop. denominations (Pick ##: 24, 25, 26, 27) are all very similar in design, equal in size and differ in color. All these notes had the same inscription "being in circulation on an equal footing with copper coin". However, the 50 Kop. note (Pick # 31) was large and had its own design and different inscription: "being in circulation on an equal footing with exchangeable silver coin".

In March 1917 the Czar Nicolas II abdicated, and the government under Kerenski assumed power until the October revolution on 7 November 1917. Inflation increased rapidly. First the small format 20 and 40 Rubles notes (Pick ## 41 and 42) were issued, These notes frequently were passed on in uncut printing sheets or parts of them, thereof because single banknotes (60 x 50 mm each) were almost worthless. Further the Kerenski government issued 250 and 1000 Rubles banknotes (Pick ##: 36 and 37), designed by the Latvian graphic arts professor Rihard Zarrinsch. One interesting thing: you can see on the front of these banknotes in underprint, just under numerals of 250 and 1000, and in the center of front side of the 1000 Rubles note, the "swastika" sign (in Latvian mythology this sign is known as "thunder cross"). Both versions of this sign - right and reversed- very frequently appear on Latvian postage stamps and as watermarks, and it should be noted here that this ornament appears in many countries of the world on ceramics and textiles, long before a Latvia existed. It is the symbol of the sun, probably first known in ancient India. It has absolutely nothing to do with Nazi Germany. The Latvian Air Forces used this as emblem in 1919 - 1940. Because the 1000 Rubles note shows on the back side the domed roof of the Taurian palace in Sankt - Petersburg, where the Government Duma (Russian Parliament) held office, this note was named in Latvia by the population and even in official announcements as "duma`s money".

In April 1917 the third issue of currency tokens was issued, the denominations of 1, 2 and 3 Kop. (Pick ## 32, 33 and 34). But Russia now being a republic, the coat of arms was missed from the back side. The front site of the tokens was the same as in the second issue.

The Kerenski notes were all emitted in 1917, but used in Latvia till the end of 1919. The first issue of 20 and 40 Rubles notes was printed on rather soft and poor quality paper, and was handled due to high inflation even in whole uncut sheets. These were the first Kerenski notes, that lose any value.

The following 250 and 1000 Rubles notes were longer lasting, and were legal tender used by Soviet Russia, the Soviet Latvian Republic and the Republic of Latvia, where they were declared invalid in the end of 1919 by the Ulmanis Government.

The "Russian Soviet Federal Socialist Republic" (RSFSR) was founded by the 5th All - Soviet Congress in July 1918. It was the actual successor (not considering the Kerenski episode) of Imperial Russia, until it became a member - republic of the USSR founded on 30 December 1922. Thus all money and postage stamps after the Kerenski issues were emissions of the RSFSR. During the short period of 1918 - 1919 due to inflation 24 different banknotes were put into circulation, and at least a part of them were legal tender in Latvia while under Soviet rule.

The first notes were 1,2 and 3 Rubles notes (Pick ## 81, 82, 83). Notes of common design, single - colored obverse differs depending on face value. The reverse shows a large denomination figure within a multi - colored rosette in the center of a colored ground. Notes are of the same small size - 34 x 43 mm over the colored design. The paper is watermarked with shadow squares over the entire surface. Printed in sheets of 25 notes each (5 x 5). They were frequently handled by the entire printing sheet or part of it. People called them "Leninki".

The first phase of the occupation of Latvia by the German Army took place between March and September 1915. Yelgawa (German - Mitau) was taken on 1 August 1915, but then the eastern front came to a 2 year standstill just 30 km before Riga, the capital of Latvia, then Stretching upstream along the Daugava (Russian - Dvina) river. This way Courland (Kurlandia) came into the hands of the Germans for four years.

The Germans organized local self - government for the population, but did not supply them with currency for circulation. The Russian currency was declared invalid. Although it appears that in 1915 the German Imperial currency was not officially legalized as legal tender in the occupied Baltic countries, it stands for reason that great sums must have been brought into circulation by the army and its civilian personnel.

In 1916 the German "Ostbank fur Handel und Gewerbe, Darlehnskasse Ost" = Eastern Bank for Commerce and Trade, Credit Bank, issued Ruble / Kopeck banknotes, so called "Ost - Rubel". This new currency was intended for the entire occupied eastern territory by the German Army. The obverse is in German and the reverse - in the three languages: Polish, Lithuanian, Latvian. They were issued in Posen, West - Prussia (now in Poland). The following denominations were emitted: 20 and 50 Kopeken, 1, 3, 10 ,25 and 100 Rubel. Also in 1916 the German Commander of the Occupation Army (Ob.-Ost) had minted 1, 2 and 3 Kopeck iron coins in two languages: German and Russian.

In 1918 the German "Darlehnskasse Ost" = Eastern Credit Bank issued at Kowno (now Lithuanian Kaunas) new Mark / Pfennig banknotes ("Kassenschein") also the obverse in German, but reverse only in Latvian and Lithuanian. They were called "Ost - Mark". The following denominations were emitted: 1/2, 1, 2, 5, 20, 50, 100 and 1000 Mark.

In order to revive the economy of the country, the three largest towns took the initiative to issue municipal credit notes, to be reimbursable after the war. Under German occupation the towns of Liepaya (Libau in German), Yelgava (Mitau in German) and Ventspils (Windau in German) emitted such notes - all in 1915, but some Yelgava notes also in 1918. The following denominations of credit notes were emitted:

Liepaya: 1, 2, 3, 5, 10, 20, 25, 50 Kop. - both sides in Russian;

1, 2, 3, 5 10 Rubles - obverse in German, reverse in Russian;

Yelgava 1, 2, 3, 5, 6, 10, 20, 25, 30, 50 Kop.

1, 3, 5, 10, 20, 50 Rubles

5 Pfennig and 100 Mark - obverse in German, reverse in Russian.

Ventspils 1, 3, 5,10, 20, 50 Kop. - only one side, in Russian

All these notes were circulated primarily in the towns themselves and the vicinity, but also in other towns. The Yelgava notes specify that they are legal tender throughout Courland.

On 18 November 1918 Latvian National Council under Yanis Tchakste proclaimed in Riga the independent Democratic Republic of Latvia. The first minister president became Karlis Ulmanis, who in 1940 was forced to end his political career while serving as President of Latvia and was deported to Siberia. Regarding the financial activities of the provisional Latvian government only the below cited announcement in the "Temporary Government Herald" is available:

PVV Nr.2 of 23 December 1918. Instructions regarding domestic Latvian independence short term 5% bonds:

1. The bonds must be purchased at face value.

2. The bonds may be purchased in the following currencies, applying rates: 1 Imperial Russian Ruble = 80 Ost - Kopeken = 1.25 Kerenski Rubles. 20 and 40 Rubles of Kerenski notes are not acceptable.

3. The sale of bonds closes on 14 January 1919.

In late November 1918 the Soviet Latvian forces crossed the Soviet Russian border and started to occupy the Latvian territory with hardly any resistance by the German Army due to the existing armistice from 11 November 1918. The Soviet Forces entered Riga on 3 January 1919, and soon the front line came to a standstill at the Venta river. The Germans and the Ulmanis Government had only left a small part of territory consisted of the town of Liepaya and to the east to town Kuldiga.

Under this very confused situation the Latvian Provisional Government announced the rate of exchange for the valid currencies: 1 Imperial Russian Ruble = 0.80 Ost-Rubel = 1.25 Kerenski Rubles. This meant that in contradiction to the German policy, the Russian Rubles again became the legal tender. At that time no currency of the Republic of Latvia existed yet.

After the Germans and the Ulmanis government had evacuated to Liepaya, in Riga a Soviet Latvian government was proclaimed under Peter Stuchka.

On 22 March 1919 the Ulmanis Government in Liepaya published a law by which the first national Latvian monetary units were established: 1 Latvian Rublis = 100 Latvian Kapeikas. The government was authorized to issue currency to a total value of 25 million Latvian Rubli in the following denominations: 1, 3, 5, 10, 50 Kapeikas, and 1, 3, 5, 10, 25, 100 and 500 Rubli. For the other legal monetary units the following exchange rates were established: 1 Latvian Rublis = 1 Ost - Rubel = 1.5 Russian Imperial Ruble. Under the Ulmanis Government while in Liepaya, the Meyer printing shop had finished for emission 25 Rubli banknotes to the total amount of 650,000 Rubli.

The German and National Latvian political and military aims were contradictory, and the relationship in early 1919 in Liepaya became increasingly inimical. During a local military revolt Ulmanis and his government did seek refuge with the Western Allies, but the Germans selected the Latvian pastor and writer Andrievs Niedra as their official Latvian representative, who on 10 May 1919 founded in Liepaya a provisional pro-German government. He continued to emit the 1 and 25 Rublis banknotes as they were originally planned by the Ulmanis government. Under the Niedra`s rule banknotes to the total value of 830,000 Rubli were emitted. How many notes of each denomination were printed in Liepaya under Niedra is not certain. Because of their commonsense the 1 Rublis obviously were printed in great quantity. The color of these notes was violet - blue / ochre, and it is quite a peculiar Latvian banknote, as will be explained later.

In March 1919 the joint German - Latvian forces counterattacked the Soviets, and on 22 May 1919 conquered Riga. The collaboration between the Western Allies and National Latvians determined the future developments: K.Ulmanis and his government returned on 8 July 1919 in Riga, but A.Niedra vanished to Germany.

The printing of the banknotes was now continued by the A.Grosset printing works in Riga using the existing stones. The 25 Rubli notes were printed in the original colors but the 1 Rublis note was now printed in dark / light green. According to Platbarzdis the Liepaya and Riga printed 25 Rubli notes can be distinguished only by the color of their serial numbers (First K.Ulmanis`s issue - blue; A.Niedra`s - red, K.Ulmanis`s continued - green). The information here is not identical in various sources. At any rate - the Minister of Finance, Erhards, published in V.V. Nr.4 of 5 August 1919 the official announcement "that in order to save the population from financial losses" - all banknotes in Latvian Rublis, printed in Liepaya and in Riga, were legal tender, until being replaced by other banknotes. The reason why the colors of the 25 Rubli notes printed in Riga were not changed, remains open for discussions.

  During the period November 1918 to January 1920 the Soviet Latvian regime had various parts of the territory of Latvia under its control at different times. At its maximum it stretched from the Soviet Russian border in the north - west to the river Venta in Courland. Riga, the capital, was held from 3 January to 22 May 1919. In that time the Riga Worker`s Council issued four denominations of "exchange notes" designated to be valid till 1 January 1920. Only the denominations as such were numbered: 1 Rublis - AR, 3 Rubli - AB, 5 Rubli - RO, 10 Rubli - AK. The total issue planned was somewhat more than 4 millions Rublew.

The notes were printed at the A.Grosset printing shop, later part at the Government Printing Shop. When the Soviets left Riga on 22 May, the notes existed in various state of completion, and the 3, 5. and 10 Rubli notes were printed on one side of the sheet only. The 5 and 10 Rubli semifinished sheets were later used by National Latvian Post for printing Latvian stamps. Of all the four denomination sheets only the blue 5 Rubli sheets were numbered, whereby they first were cut into half and subsequently numbered. The exact reason is not known, but it is typical that in such cases the postage stamp side of the sheet is also numbered in blue.

It is perhaps of interest to note that on these banknotes a scythe appears in the coat of arms, whereas other Soviet republics show a sickle there. The alleged reason was that by this way Latvia was supposed to be shown as an agriculturally more advanced country than others. After this event scythes were allegedly banned from the seal.

After the liberation of Riga by the German - Latvian Forces on 22 May 1919, the Soviet Latvian troops retreated north and north - eastward, and Cesis was taken by the National Latvian forces (the German Army had withdrawn) on 26 May. Until that time the Cesis District Worker`s Deputy Council Executive Committee had issued "Credit Coupons" due to a shortage of low money denominations in early 1919, with denominations of 5 and 10 Rubli. They were exchangeable originally until 15 March, then extended till 1 May. The coupons bear the threat that forgers of these notes will be shot to death.

After the armistice of 11 November 1918 the German Army officially was not to engage in fighting operations in the Baltic countries any more. On the other hand the Western Allies respected their Alliance with Czarist Russia and supported various "White Russian" armed forces to fight Soviet Russia. Thus they tolerated the creation of a "Western Army" headed by the former Russian Army colonel Awalow - Bermondt, and consisting of former Russian PW`s remnants of the German Army, and German voluntary units (Freicorps) brought in from Germany. In the fall of 1919 Bermondt had his army headquarters established in Yelgava (Mitau), and his forces were about 40,000 men. Actually the "Western Army" was under German control, and their primary aim was to reconquer Riga. Thus an armed confrontation with the Latvian Army was predetermined.

As a matter of financial speculation and presentation of authority, the "Western Army" emitted its own money by ordering it to the J.Steffenhagen printing shop in Yelgava. These banknotes were in German on the obverse and in Russian on the reverse, and were issued in the denominations of 1, 2, 5, 10 and 50 Marks. The 2 Mark notes were destroyed in a railway fire, and the 50 Mark notes were printed in Berlin and probably remained there. These notes were allegedly covered by the "property of the army" and actually had no commercial value.

The "Bermondt Money" is also of philatelic interest to the extent that a stock of semifinished sheets of 10 Mark notes in the early 1920-ies were used by the Latvian Post for printing several issues of Latvian stamps on them. It so happened that on the reverse side of these stamps the German text side of the 10 Mark notes always appears.

The money was "officially" introduced for general use in the areas under the "Western Army" control on 21 October 1919, whereby the following rates of exchange became compulsory: 2 Bermondt Mark = 1 Ost - Rubel (Dahrlehnskasse Ost) = 2 Imperial Russian Roubles. An exchange as above was obviously possible under extraordinary conditions.

Bermondt had his army attack the Latvians on 8 October 1919, and the forces soon reached the southern suburbs of Riga and the Daugava river. The Latvians, supported by the Western Allied Navy, defeated the Bermondt forces, and on 11 November they retreated to Yelgava, and were then dissolved.

  After the armistice of Strazdumuiza on 2 July 1919 between the Latvian National government and the Germans, and while the front against the Soviet Latvian forces had come to a standstill in Eastern Latgale, the Ulmanis government made all possible attempts to reestablish the economy of the badly damaged country.

In the field of monetary matters this situation is best illustrated by excerpts from publications:

In the newspaper "Tautas balss" (Voice of the People) Nr. 75, July 29, 1919, the announcement dated Riga, July 25, 1919, and signed by Minister President K.Ulmanis and Minister of Finance Mr.Erhards was published: "All Russian money is legal currency, provided that the paper money is properly legible, and at least 7/8 of the note is produced. The Russian banknotes of denomination 50 Kop., as well as 1, 3, 5, 10, 25, 50, 100 and 500 Rubles have to be accepted in any amount. However, small change notes of 1, 2, 3 and 5 Kop. may be accepted up to a total of three Rubles".

PTD Circular August 9, 1919; Order of the Latvian Provisional Government, Riga, August 7, 1919, signed by K.Ulmanis, Minister President: "In addition to payments in Latvian money, the postal installations are to accept the following currencies at the rates: 1 Latvian Rbl = 1 Ost Rbl = 2 German Marks = 2 Imperial Russian Rbl. Not valid any longer are: the Russian Doma banknotes (Kerenski issues of 250 and 1000 Rbl banknotes), Kerenski 20 and 40 Rbl notes, Lenin notes of 1, 2 and 3 Rbl denomination, as well as the banknotes issued by the Riga Workers Deputy Council. Contracts concluded prior to the publication of this order are to be filled in the currency in which they had been concluded. All taxes are to be paid in Latvian Rubli".

The general confusion on monetary matters is exemplified by the notes below: "Tautas balss", Nr.86, August 10, 1919: The Ministry of Finances announced on 29 July 1919 that 25 Rubli banknotes have appeared in circulation without serial numbers. These banknotes are allegedly counterfeit. The same newspaper repeated on August 26 the same information, but remarked that the banknotes without serial numbers are identical to numbered notes. According to information from another source banknotes have been stolen from the printing works during the A.Niedra mutiny and put into circulation. They are obviously the 25 Rubli notes mentioned above.

According to A.Platbarzdis in 1919 and 1920 very well executed Latvian 50 and 500 Rubli banknotes appeared, which had been printed in Soviet Russia, and put into circulation for clandestine operations against the National Latvian Government.

V.V. Nr.9, August 10, 1919: "The City of Riga is authorized to issue municipal credit notes to the total amount of 8 million Latvian Rubli in the following denominations: 1 Rublis notes to the value of 2 million Rubli, 3 Rubli notes to the value of 6 million Rubli. This currency is legal tender in Riga and the District of Riga. The rate of exchange is to be: 1 Latvian Rublis = 1,50 Imperial Russian Rubles. Riga, August 9, 1919, /K.Ulmanis, Minister - President/".

V.V. Nr.31, September 5, 1919; Law concerning the issue of 75 million Latvian Rubli in government banknotes: "5,000,000 banknotes of 1 Rublis = 5,000,000 Rubli, 2,000,000 banknotes of 5 Rubli = 10,000,000 Rubli, 1,000,000 banknotes of 10 Rubli = 10,000,000 Rubli, 600,000 banknotes of 25 Rubli = 15,000,000 Rubli, 350,000 banknotes of 100 Rubli = 35,000,000 Rubli. /J.Tchakste, President of the National Council/". Now, can you see why the catalog prices for Latvian notes are so high and grow from year to year?

In the newspaper "Tautas balss" Nr.118, September 17, 1919, an announcement of the Ministry of Finances was published concerning Russian money. Based on the law of the National Council, acceptance of the Russian Czarist currency, besides Latvian currency, and extending the order of the Provisional Government of 25 July and 7 August 1919, it is hereby ordered that the following monies must be accepted:

1. Russian small change notes - 10, 15, 20, 50 Kop,, at the rate of exchange 1 Ruble in small notes = 50 Kop. in Latvian currency;

2. Russian small silver coins 5, 10, 15 and 20 Kop., as well as copper coins of 1, 2, 3 and 5 Kop. at the rate of 1 Russian Ruble in above coins total = 1 Latvian Ruble;

3. Russian silver coins 25, 50 Kop, and 1 Rbl. at the rate of 1 Russian Ruble = 2 Latvian Rubles;

4. Russian gold coins 5, 10 and 15 Rubles at the rate of 1 Russian Ruble = 4,50 Latvian Rubles.

Copper coins must be accepted up to 3 Rubles in total. Small silver coins, 5, 10, 15, 20, 25 and 59 Kop., - up to 20 Rubles total, but gold coins and large silver coins may be accepted without limitation.

Riga, 12 September 1919.

In early 1920, in order to relieve the shortage of small change, Latvian Kopecks were issued in four denominations, both sides being identical: 5 Kap. - red, 10 Kap. - blue, 25 Kap. - brown, 50 Kap. - violet.

The Communication and Work Ministry Herald Nr.7 of February 11 1920 announced: Based on the explanations of the Minister of Finances of 27 January 1920, as recorded under Nr.126, the Railway Administration declares thereby, that Imperial Russian gold, silver and copper coins shall be accepted by the railway ticket offices of the following rates: 10 Rbl. in gold = 200 Latvian Rubles. 1 Rbl. in large silver coins = 10 Latvian Rubles, 1 Rbl. in small silver coins = 3 Latvian Rubles, 1 Rbl. in copper coins = 2 Latvian Rubles.

In general, the population most trusted the high denomination banknotes of Imperial Russia. This perhaps could be explained by the centuries - old belief in the powerful "Almighty Russia" ruled by the Romanov dynasty for over 300 years. Even at the time when these banknotes officially lost their value, people continued to keep these notes in a safe place for an unknown future. It took same time until the population of Latvia accepted the new Latvian currency as legal tender. Actually all non - allied currencies suffered loss of value as a result of the difficult economic situation and inflation.

To end the general confusion, on 13 March 1920 the Latvian Rublis was officially declared to be henceforth the ONLY legal currency in Latvia. However, the value of the Latvian Rublis versus other currencies was not yet fixed. Thus, for example, the value of the Latvian Rublis against English £ was:

January 1920 : 1 £ = 233 Rbl

September 1920 : 1 £ = 530 Rbl

January 1921 : 1 £ = 792 Rbl

September 1921 : 1 £ = 1390 Rbl

In order to stabilize the situation, on July 14 1921 the Constitutional Assembly introduced a new fictitious currency designated the "Gold Frank" = 0.2903226 grams of pure gold, in which the international trade was to be negotiated by applying the current Latvian Rublis - "Gold Frank" equivalent rate. This rate rose rapidly, as for example:

May 27 1921 : 1 Gold Frank = 87.5 Rbl

June 1 1921 : 1 Gold Frank = 94.- Rbl

July 1 1921 : 1 Gold Frank = 97.- Rbl

Taxes were to be paid at the rate of 1 Gold Frank = 100 Latvian Rubli.

There were long discussions on how to designate the new Latvian monetary unit which would replace the Rublis, which was historically a Russian unit. The first version accepted was the "Latvian Frank" which became official to the extent that revenue stamps were issued in this denomination: 1 Frank - green, and 3 Franks - brown/ violet. They were put into circulation and occasionally also used as postage stamps.

The final stabilization occurred when in 1921/22 1 Gold Frank became equal to 50 Rubli. On August 3, 1922, the fictitious currency "Frank" was designated to become from then on the real Latvian currency named "Lats = 100 Santimi". The rate of exchange thus became: 50 Latvian Rubli = 1 Lats and it was decided that a total of approximately 48 million Lats would be emitted to replace about 2,400 million Latvian Rubli.

As the Lat - banknotes could not be printed to meet the requirements, the 500 Rubli note was overprinted "10 Latu". It is only in Latvian, and so are all future banknotes. People called this note "pike", which image is somewhat difficult to recognize on the reverse above the anchor.

By order of the Latvian Government, effective from November 1, 1922, the Bank of Latvia carried out all financial operations in Lat/ Santim currency only

The Republic of Latvia emitted during its independent existence between 1923 and 1940 banknotes of 21 different designs, at the denominations of: 5, 10, 20, 25, 50, 100, 500 Lats.

The first coins of the Republic of Latvia were issued on 5 March 1923, which were the 1, 2 and 5 Santimi with mintage year 1922. Until that time the only Latvian small change were: the Kapiekas notes as described above.

Until the occupation of Latvia by the German Army in 1915/17 only Russian coins were in circulation, primarily issued under Czar Nicolas II (1897 - 1917). Under his rule the following coins issued and remained in circulation in Latvia until their replacement by Latvian money:

Copper: 1/4, 1/2, 1, 2, 3 and 5 Kopecks;

Silver: 5, 10, 15, 20, 25, 50 Kopecks and 1 Rouble;

Gold: 5 and 10 Roubles.

In 1916 the Supreme Command of the German Army (East) issued for use in the occupied Baltic territories iron coins of the denominations 1, 2 and 3 Kopecks. One side had the text "Bezirk des Oberbefehlshabers Ost" (District of the Supreme Command East - in German), and on the other side - the denomination inside the sign of the "Iron Cross" in Russian.

The rate of exchange as ordered by the German Command was 1 Ruble = 2 Marks.

The Latvian coins "Lat" and "Santim" were struck of different alloys which generally were known by common names of "copper" and "silver". The composition by weight was determined by law as follows: "copper" was actually bronze [95% copper (Cu), 4% tin (Sn), 1% zinc (Zn)] - denominations 1, 2, 5 Santimi; "nickel" was really pure 100% nickel (Ni) - denominations 10, 20, 50 Santimi; "silver" [83.5% silver (Ag), 16.5% copper (Cu)] - 1, 2, 5 Lati.

Below is given a survey of all coins struck from 1922 to 1939 (according A.Platbarzdis):

* - coined with "1926"; ^ - coined with "1932".

Modern coins of the Republic of Latvia - fine images and official descriptions - you can see at the site of Bank of Latvia.

On the 15 June 1940 the rate of exchange of the Latvian Lats was as follows:

1 UK £ = 29.35 Ls

1 USD = 5.40 Ls

100 SFR = 121.25 Ls

100 SEK = 128.50 Ls

100 RM = 205.00 Ls

The Soviet Army occupied Riga on June 17, 1940, and thus took control of the entire Republic of Latvia. Immediately all bank and saving account deposits were frozen, and between 21 and 30 June every depositor was allowed to withdraw from his account not more than 50 Lats. Sometime later depositors were allowed to withdraw 100 Lats per month, but beginning the November 1940, instead of the100 Lats - 100 soviet Rubles were paid out.

Already at the beginning of the Soviet occupation rumors were spreading that the Latvian Lat might abolished, and people started to hoard silver coins. Shopkeepers not rarely refused to change paper money, allegedly due to lack of change. At that time some 32 million Lats containing 134 tons of pure silver was withdrawn from circulation by the people and was hidden. From November 25, 1940, the Soviet Ruble was introduced as a legal tender. The exchange rate was 1 Lat = 1 Soviet Ruble, both being legal means of payments. On August 2, 1940, an order was issued that forbade all trading of stocks and bonds. All Government bonds were to be surrendered to the Bank of Latvia without reimbursement (some 900 million Lats). In July 1940 all jewelry stores were ordered to render their stock of valuables to the Bank of Latvia, where they were confiscated.

On 25 March 1941 a secret order was issued to all financial institutions that out of private deposits no more than 1000 Rubles may be paid out to the owner, whereby the entire amount above was confiscated by the state. Also on 25 March 1941 small, inconspicuous notices appeared in public newspapers that by the order of the Latvian Socialist Republic, Council of the People Commissars and the Central Committee of the Communist Party - the monetary system of Lat/ Santim was abolished as of the same date, and shall not be accepted any longer for payment. In the official international bank bulletin published in Vienna, a note appeared to the effect that by order of the National Bank of the USSR, it would exchange all banknotes and coins of Estonia, Latvia and Lithuania until 25 March 1941. After 25 March 1941 these banknotes became worthless. Just before that the purchasing power of the Soviet Ruble approximately equaled that of 10 Latvian Santimi in 1939.

During this Soviet period of Latvia there were following currencies in circulation:

Coins: bronze: 1, 2, 3, 5 Kopecks;

nickel: 10, 15, 20 Kopecks;

Notes: 1, 3, 5 Rubles, 1938 issue (Pick ## 213, 214, 215)

1, 3, 5, 10 Chervontsev, 1937 issue (Pick ## 202 - 205);

The German Army occupied Latvia in July 1941 and soon thereafter introduced the currency "Reichskreditkassenschein", which were Reichsmark specially designed for the occupied territories. The design of these notes was quite different from the ones used in Germany. At the beginning the rate of exchange was determined as follows:

1 Soviet Ruble = 1 Latvian Lats = 0.10 Reichsmark.

In special cases, in an exchange of Reichsmark to Kreditkassenscheine, the rate of 1 : 1 was to be applied. The transfer of both Mark currencies was subject to official control. From July to September 1941 the prices and wages established by the Soviets remained unchanged, applying the rate of exchange 1 Rubel = 10 Pfennigs. From then on new wages and tariffs were introduced.

In late summer 1944 the Soviet Army conquered the eastern part of Latvia, and Riga was taken by the Soviets on October 13, 1944. Courland was held by the Germans at a line reaching from west of Tukums to south of Liepaya until the entire German Army surrendered to the Soviet Army on the 9th of May, 1945. Subsequently the entire territory of Latvia became the Soviet Latvian Republic again "de facto", as a member - republic of the USSR. So, the previous Soviet currency returned, the same as in 1940.

Next came the USSR currency reform in 1947, then in 1961.

(To be continued)

1. A.Platbarzdis - Coins and notes of Estonia, Latvia and Lithuania.

2. N.Yakimovs, V.Marcilger - The postal and monetary history of Latvia 1918 - 1945.

3. A.Karklinsh - Our currency reform. Riga. 1927. (in Latvian)

4. D.A.Senkevich - State paper money of RSFSR and USSR 1918 - 1961.

This page hosted by Get your own Free Home Page