Red overprint 10 Latu on 500 Rublis 1920 - Very rare banknote
Bank of Latvia - 10 Latvian Lats banknote of 1922 - old 500-ruble note overprinted with the new denomination of 10 Latu.
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 British Pounds £ was:
January 1920 : 1 £ British Pound = 233 Latvian Rublis
September 1920 : 1 £ British Pound = 530 Latvian Rublis
January 1921 : 1 £ British Pound = 792 Latvian Rublis
September 1921 : 1 £ British Pound = 1390 Latvian Rublis
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 Latvian Rublis
June 1 1921 : 1 Gold Frank = 94.- Latvian Rublis
July 1 1921 : 1 Gold Frank = 97.- Latvian Rublis
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.