30th anniversary of the litas. Production of litas banknotes

This year marks thirty years since the litas began to circulate again in Lithuania after a more than 50-year break. This happened on 25 June 1993. We had the litas for a significant part of our history until the introduction of the euro in Lithuania in 2015. During this period, Lithuania changed and modernised, and the litas became an important symbol of the change of independent Lithuania. In this series of articles dedicated to the 30th anniversary of the litas, we will discuss the most important stages of the development of the litas, its issuance, and remember the most important elements of the design of litas banknotes and coins. Today — about the production and delivery of litas banknotes to Lithuania. 

As mentioned earlier, the decision was made to print the first litas banknotes at the United States Banknote Corporation (USBC). The agreement on the printing of litas banknotes between the Bank of Lithuania, the Government of the Republic of Lithuania, and the US banknote printing company USBC was signed on 19–22 December 1990, but the financing issue remained unresolved. The contract stipulated that, by 29 December 1990, an advance of at least 10% ($66,2050) must be paid to the US company for the printing of the banknotes. However, there were delays in payments, a lack of funds, and the difficult political situation was also an issue. The advance was paid only on 15 January 1991 due to the difficult events of January 1991, when, with the help of Soviet military units and local collaborators, an attempt was made in Lithuania to carry out a coup d’état and restore the political power of the USSR. The Bank of Lithuania, which was at that time located at the premises of the USSR State Bank of the Republic of Lithuania, was on duty around the clock on those days, supported by patriotically motivated former Gosbank cashiers with weapons (Kalashnikov rifles). When leaving the bank, its employees took and concealed the most important documents so that they would not fall into the hands of the occupants, while the available money and currency reserves were hidden in the trusted branches of the district banks. Only 2-3 trustworthy people knew about it.

In such difficult conditions of political tensions and social unrest, the composition of the Government changed several times, which also slowed down the process of the implementation of the agreement, the search for funding sources, and the resolution of other issues. 

Five months later, a letter of credit (commitment) for $584,8450 was formalised at the Swedish bank Svenska Handelsbanken on 3 April 1991. On 19 April 1991, the Ministry of Finance of the Republic of Lithuania transferred to a separate letter of credit account, opened by Svenska Handelsbanken, the amount of $5,154,257.82 and 1,159,300.94 German marks by two transfers from the Monetary Fund of the Republic of Lithuania. Recalling this period, Gediminas Vagnorius said that “now those six million dollars would mean nothing to the state, but at that time it was a huge amount, the money had to be found, paid on time, and it was necessary for those litas to actually be produced.” 

Only two persons knew about the progress of the contract — Vilius Baldišis, Chair of the Board of the Bank of Lithuania, and Rimantas Purtulis, appointed as Chief Expert of the Bank of Lithuania on 20 November 1990 and later, as the Chair’s assistant. Unfortunately, due to the increased secrecy and lack of competence, much had to be done in a hurry, without coordination between people, and the proper specifications of the banknotes had not been agreed upon. Relatively simple means of production were chosen, so the quality of the banknotes was not high and there was a serious risk of counterfeiting. 

The negotiations took place in secret, but there were many obstacles on the part of the USSR. R. Purtulis said: “My apartment and workrooms were secretly searched several times in my absence. In addition, there was a constant threat of seizure by the Bank, regarding which we were regularly informed on by the Government. Documents were kept hidden and all the details relating to the execution of the contract were kept secret.”

Litas banknotes were printed at two USBC printing houses in Chicago and Los Angeles. In the first offset, 10, 20, and 50 litas were printed, while in the second rotogravure — 100, 500, and 1,000 litas banknotes. A special 100% cotton paper, produced by the Canadian company Domtar Specialty Fine Papers, was used for their production. According to the agreement of 19 December 1990, litas banknotes were to be delivered by sea to Klaipėda or another port of the Baltic Sea at the request of the Government and the Bank of Lithuania. The contract also provided for the possibility of obtaining cargo by air if Lithuanian representatives so wished and the proposed transportation costs were acceptable. However, air travel would have cost a lot, so only the sea route was chosen. 

Due to malfunctions in printing works, the production of banknotes was further delayed, but the first two containers of printed litas banknotes, i.e., 48 million units, were shipped from New York to Klaipėda on 6 November 1991. For secrecy reasons, documents referred to the banknote load and related work as “Technika-2.” The banknotes that arrived were sent to the branches of the Bank of Lithuania at the time. By the way, some of the banknotes were defective. 

Other litas banknote shipments arrived in Lithuania on 14 December 1991, 2, 8, and 23 January 1992, 21 February, 26 March, 30 April, 1 and 13 June, 23 and 26 July 1992. The last two banknote containers were brought by ship from Bremen to Klaipėda on 8 August 1992. Most of the shipments to Lithuania were brought by ships through the port of Klaipėda. Only a small part of the 100 litas banknotes were brought through Copenhagen to Vilnius Airport on two Sterling Airlines and Lithuanian Airlines flights — 1.5 million units each on 2 and 8 January 1992.