30th anniversary of the litas. Search for the means of litas production

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 search for printing possibilities of litas banknotes. 

In the last article, we talked about how the first litas were created. At the same time, there were also searches on where and how to print litas banknotes and mint coins. These searches were as complex as the decisions related to the creation of money. It was clear that using the printing technologies available in Lithuania at the time would not produce good-quality money. It was also obvious that no one in Lithuania had any idea what technology and what printing equipment was needed to perform such work. On the other hand, there was no information available on how and where money was made in the West. Three options were considered in the search for national money production options: printing money abroad, printing it in Lithuania, or printing it in one of the Baltic States by establishing a common money printing house for the central banks of Lithuania, Latvia, and Estonia. The conclusion was made that it was not appropriate to organise the printing of money in Lithuania or any other Baltic state due to lack of funds and high costs. Swiss money-making experts expressed the opinion that only countries with at least 30 million inhabitants can maintain their own cost-effective printing works. 

Money printing companies from the United Kingdom, Germany, France, Switzerland, and other countries were interviewed. On 30 March 1990, the negotiating team went to Germany and Switzerland, on behalf of K. D. Prunskiene, to discuss the production of Lithuanian money.

Swisttal, a small town in Germany, was where Lithuanian negotiators initially settled on. They met with representatives of well-known money printing companies, but although warmly accepted, they could not boast very productive results of the negotiations. The main question was where Lithuanians would get the money to pay for their services.

A representative of the English company Thomas De La Rue, which took over the rights of a company that produced litas banknotes for Lithuania before World War II, rushed from England to Germany to meet the bankers from Lithuania. In view of the wishes of Lithuanians to print litas as soon as possible, the representative of the English company brought samples of Lithuanian banknotes from the interwar period. They had to prove the reliability of the company. According to the British representatives, the litas at the time, although they looked fine and were safe enough to meet the security requirements, did not meet the standards of money production that had made enormous progress over decades and the requirements of modern money design and safety. Therefore, it was proposed to improve them. According to the representatives of Thomas De La Rue, various modernisation options were available. According to one of them, it was possible to leave the current litas drawings or to adjust their individual fragments. The Lithuanians critically assessed this proposal. It was understood that such an option, although it would be one of the quick ways to make the nation’s own money, was not acceptable, because not only did the money at that time not meet modern requirements, but also such a solution was short-term, after which a new issue of litas banknotes would have to be considered again very quickly. In addition, the English price offered at that time seemed a little too high.

When trying to negotiate with the German company Giesecke & Devrient, it became clear that after the fall of the Berlin Wall between East and West, the country was already preparing to unite and additionally print their marks, so it was unable to quickly execute Lithuania’s order. 

The Swiss company Füssli Security Printing welcomed Lithuania’s negotiators warmly, but, like the Germans, considered everything very formally and demanded: “either you are a member of the United Nations, or have permission from Moscow.” The representatives of De La Rue Giori, a Swiss company selling money printing equipment, followed the same approach. They sold part of their production to the USSR company Goznak, so they did not want to ruin relations with large and influential customers. 

Although Lithuania had restored its statehood, the country for some time had been dominated by the secret security service and other force structures created by the Soviet authorities. Preparations for the introduction of the national currency, closed and public discussions of politicians, bankers, painters, historians, their meetings, and the steps of negotiators in the search of possibilities to print money abroad, were closely monitored by the KGB and its branch in Lithuania. Many of the things related to the creation and production of a new currency were semi-public, so it was really difficult to ensure even a minimum level of protection of information.

Moreover, the willingness to help and the constant attention of Western companies, who kindly assumed the role of intermediaries and actively participated in the search for future money producers of Lithuania, were based on a single calculation — to receive profitable orders. There weren’t many money producers in the world, so the companies contacted by intermediaries were the same as those contacted by the Bank of Lithuania. In the long run, the services of intermediaries of such companies were abandoned. 

Due to the lack of currency funds, the financing of the national money production transaction was of particular interest to Lithuania. Finding and securing credit on favourable terms was one of the most important tasks of the Republic’s leadership. After discussing all possible printing options and the prices offered, two companies gradually emerged and continued to negotiate with them. The United States Banknote Corporation (USBC) and the French company Francois Charles Oberthur.

In July 1990, the French submitted a revised draft contract, and in August our delegation had already travelled to France to negotiate the printing of money. Projects of litas banknotes created by Lithuanian artists were also handed over to Francois Charles Oberthur. However, information was received at the end of October 1990 that the Bank of France was abstaining from previous pledges to credit Lithuanian banknote printing due to the changed political situation. It could do so only with the express approval of the French Government. The French government did not want to risk worsening relations with Moscow.

On 30 October 1990, the Government of the Republic of Lithuania confirmed in writing to the US company USBC the mandate of Lithuania’s negotiators to negotiate banknote printing, delivery deadlines, technical parameters, financing, and similar issues. The government began an intensive conference marathon and continued to look for ways to finance the production of money. Issues of banknote printing were also discussed in the Government at the meeting of 17 November 1990, which was attended by K. D. Prunskienė, V. Baldišis, B. Gudelis, and R. Purtulis. It was finally decided to print the banknotes at USBC in the United States. 

On 5 December 1990, the US USBC division, which assessed the new specifications for the reduced security level of banknotes, submitted its offer: the value of the 260 million units banknote production contract was to be $6,620,500 (including insurance and transportation by ship to Klaipėda), while the final delivery deadline for the last banknote shipment was 6 September 1991. The payment terms were also specified. On 19 December 1990, the Director of the International Division of USBC, J. Willings, signed the contract on behalf of the USBC. The following day it was approved by the Board of the Bank of Lithuania and signed by the Chair of the Board, V. Baldišis.