The start of activities of the Bank of Lithuania in 1922

Plans to establish a bank of issue in Lithuania and introduce a national currency were developed immediately after the restoration of statehood. Unfortunately Lithuania was economically very weak country at that time so the Bank of Lithuania only began operating on October 1922. The Law on the Currency Unit and the Law of the Bank of Lithuania (on August 9 and 11, 1922, respectively) were the legal basis for the emission of the national currency and the establishment of the bank of issue. The Bank was established on 27 September 1922, and started its activities on 2 October 1922. The auksinas (Ostmarks) that circulated previously began to be exchanged into litas and centas. The founder of the Bank of Lithuania was the Government. Its fixed capital amounted 12 million litas. About 80 per cent of the Bank’s shares were state-owned, while the remaining shares could be owned by municipalities, societies and individuals. The primary objective of the Bankd of Lithuania was to regulate currency circulation, facilitate cash withdrawals, develop a sound and sustainable monetary system in Lithuania, and foster the development of agriculture, industry and trade. The Bank was granted for 20 years the exclusive right to issue banknotes, it could carry out state treasury and saving bank operations, distribute and redeem the State’s saving bonds, provide commercial credit, etc. Approximately by the middle 1923 the creation of organizational structure was finished. Professor Vladas Jurgutis (1885-1966) became the first Governor of the Bank of Lithuania.

After the occupation of Vilnius by Poland the second largest city of Lithuania became the provisional capital of the country. The Bank of Lithuania’s central office was temporarily based in the building of the former Kaunas branch of the State Bank of Russia. It was among the more modern buildings in Kaunas that could be easily adapted for state offices; therefore, after the restoration of independence, it housed various institutions, which functioned at the same or different times: the Council of the State, Cabinet of Ministers, State Bank (central treasury of the state), Ministries of Foreign Affairs, Finance, Trade and Industry, the Ministry of the Interior.

At the Bank of Lithuania General Council’s meeting on 23 April 1923, the Board of the Bank was authorized to consult with the Ministry of Finance on the purchase of the building. As the Government refused to relinquish it for permanent use by the Bank of Lithuania, it was decided to build a new building for the Bank of Lithuania nearby on the other side of the street. An international competition for the design of the Bank of Lithuania building was announced in 1924 and the construction of the building (architect Mykolas Songaila) has been started in 1925. The new building has been built in 1928.