Latvia's trade balance has been adverse since 1920. The official figures showed the following results:— The total cultivated area was thus in 1927, except for mixed grain, 990,500 hectares, as against 5,054,000 in 1909-13. The harvests were :— The grain harvest, apart from mixed grain, reached 833,000 metric tons in 1909-13, in 1920 only 322,000, in 1924 and 1927 only 710,000 and 724,00o. Only the potato harvest reached its pre-war figure, the linseed crop was the same, the flax fibre one sixth less. Four-fifths of the flax fibre harvest is exported.
When the Latvian Republic was formed on Nov. 18, 1918, the country was greatly impoverished owing to the requi sitioning of corn, cattle, horses, etc., by the German armies of occupation, though part of the supplies which could not be carried away were sold back to the peasants on the evacuation of the troops. In April 1919, a new paper currency, the Latvian rouble, was issued by the Government, which continued for a consider able period to finance its requirements by this means, with the result that the exchange in terms of sterling rose from 215.5 rou bles on Jan. 1, 1920, to 2,000-2,400 roubles in May 1921. After the demobilization of the army in the autumn of 1920, the fresh issues of currency were mainly for production purposes, and flax, hides and linseed were purchased by this means from the peasants. The sale of the stocks thus acquired brought in 2,000,000,000 paper roubles to the State and enabled the finance minister in office in March 1921, Ringold Kalning, to raise the value of the rouble to 1,140 to the pound sterling, at which point it was sta bilised. The currency was backed by gold to the value of 15, 000,00o gold francs and by foreign balances amounting to 7, 730,00o gold francs. The lat ( =gold franc) was fixed at a value of 5o paper roubles, and the 2,270.000,00o paper roubles in cir culation were thus covered to the extent of about 5o% in gold. In 1923 the Bank of Latvia was founded and provided by the State with a capital of i0,000,00o lats.
The total foreign debt amounted to 39,360,00o lats in the mid dle of 1922, of which one-third had been paid off by the middle of 1925. At the end of 1925 there remains a debt of 5,5oo,000 dollars to the United States for famine relief in the summer of 1919, and of about L1,350,000 newly regulated debt to England for war deliveries. The finances in 1922-8 have been very soundly
But an inquiry undertaken by the Latvian "Ekonomists" in 1925 No. 22 showed that the import figures were 1 o% too high.
By reducing the import figure by 0%, and raising the export figure by 0%, the adverse balance is reduced from 70,000,00o to 41,000,00o lats. But unsold imported goods valued at 70,000,00o are said to be in Latvian warehouses. Meanwhile the adverse balance created such anxiety, that parliament decided in 1926 to increase the existing high customs duties of 20% to i00%.
Latvia's chief exports are timber amounting to about 6o,000,000 lats, about four-fifths of which goes to England, and flax export amounting to about 20,000 tons, valued at 50,o0o,00o lats. In the calendar year (1927) the butter export was estimated to be io, 761,000 kg. valued at 41,262,000 lats.
The chief imports are textiles, 50,000,000 lats, machines 24, 000,000, foodstuffs 70,000,000. In 1925-27 110,000 tons of rye and wheat were imported, 35,000 tons of sugar, 4,000,000 lats worth of tobacco. The imports of tea and coffee are small, also of fruits, on account of the high customs duties.
Under the agrarian laws, 499 private estates were appropriated in Courland with an area of 1,124,000 hectares; in Livonia 1,300,000 hectares; in Latgale about 750,000 hectares. But from this area must be deducted the old peasant properties, also forest and uncultivable land. In reality there re mained for division among the newly established peasant proper ties in Livonia and Courland only an area of 832,000 hectares of agricultural land, i.e., arable, meadow and grazing land ; in Latgale rather more than 250,000 hectares. Up to June 15, 1925, 82,761 new farms were established, enclosing ioo,000 hectares of forest land. The newly founded peasant properties consisted of 15 to 17 hectares, the largest to 22 hectares. But included in the above mentioned 82,761 new farms are about one-third garden and artisans' holdings with an area of about 2 to 3 hectares. A further 20,000 small holdings are to be established. The State has retained about 1,500,00o hectares of forest and about 5oo,000 hectares of uncultivable land, chiefly peat moor; the former landowning no bility have only retained so hectares of land each.