Editing History of Latvia (section)

==Ulmanis dictatorship, 1934–40==
{{Main|1934 Latvian coup d'état}}

On the night from May 15 to 16, 1934 the Prime Minister [[Kārlis Ulmanis]] and Minister of War [[Jānis Balodis]], fathers of Latvian independence, took power by a bloodless coup d'état. Parliament and Constitution were suspended, State of War introduced, all political parties banned and press censorship established. Members of the [[Pērkonkrusts]], [[Latvian Social Democratic Workers' Party]],  pro-Nazi activists from the [[Baltic Germans|Baltic German]] community, and other leaders from the extreme right and left were detained. Certain extremist political figures such as [[Gustavs Celmiņš]] were sentenced to imprisonment.

===Economy===
Just as in politics, in economy, the new Ulmanis regime was very active in increasing state control and planning mechanisms. In 1934 regime created the Chamber of Trade and Industry was established, followed by the Chamber of Agriculture and the Chamber of Artisans in 1935 and the Chamber of Labour in 1936. The state helped bankrupt farmers by postponing bankruptcy auctions and refinanced their debt at a lower rate. On May 29, 1934, the state took control over cooperative societies and associations. The dairy industry was placed under the control of the Central Union of Dairy Farmers.<ref name="bank.lv"/>

On April 9, 1935, a state controlled Credit Bank of Latvia was created which reduced the role of foreign capital by creating many state owned industry monopolies and joint stock companies. Buyouts and liquidations of foreign, Baltic German and Jewish owned companies become a norm. In place of many competing companies large state owned companies were created. In 1939 the state owned 38 such companies. The new JSC Vairogs produced railway carriages and [[Ford-Vairogs]] automobiles under the Ford licence. [[VEF]] made world's smallest [[Minox]] cameras and such experimental aircraft as [[VEF JDA-10M]], [[VEF I-12]] and others. Between 1936 and 1939 the [[Ķegums Hydroelectric Power Station]], with 70,000 kWh capacity largest in the Baltics, was built by Swedish companies.

After Western countries abandoned the gold standard, the Latvian lats was pegged to the British pound in September 1936. It was a devaluation that further strengthened Latvian exports. By 1939, following an export boom propelled primarily by agricultural goods, Latvia was the richest of the Baltic countries, and had a GDP per capita higher than Finland or Austria.<ref name="oDe"/>

However, the recovery from the Great Depression took almost ten years. National income was 444 lats per capita in 1933 and reached 637 lats per capita in 1938, thus finally overtaking the 1929 levels.<ref name="bank.lv"/>

After the start of World War II Latvia declared complete neutrality, but it was now completely cut off from the market of United Kingdom, as Germany had sealed off the Baltic sea. Austerity was introduced on September 3, 1939. The politically disastrous October 5, 1939 [[Soviet–Latvian Mutual Assistance Treaty]] provided new export and import opportunities. On October 18, 1939, a new trade agreement was signed with the Soviet Union. Latvia exported its food products in return receiving oil, fuel and chemicals. On December 15, 1939, a new trade agreement was also signed with the Nazi Germany.

Latvian farmers had traditionally relied on seasonal farmworkers from Poland, this was now cut off by the war, and in spring 1940 new regulations introduced compulsory work service for state employees, students and school pupils.

===Foreign relations===
In October 1936 Latvia was elected as non-permanent member of the Council of the [[League of Nations]] and retained this place for three years. In 1935 embassy in Washington was re-opened, which later served as important center for [[Latvian Diplomatic Service]] during 50 years of Soviet occupation.

After the [[Munich Agreement]] demonstrated the failure of collective security system, Latvia on December 13, 1938, proclaimed absolute neutrality. On March 28, 1939, Soviet Union without any discussions announced that it is interested in maintaining and defending Latvia's independence. On June 7, 1939, Latvia and Germany signed non-aggression treaty.

<gallery widths=180>
Minox Riga with Minostigmat 3,5 F=15 lens.jpg|[[Minox]] camera, world's smallest
Vairogsauto.jpg|Ford-Vairogs trucks
Ford-Vairogs-V8-front.jpg|[[Ford-Vairogs]] V8
<!-- [[WP:NFCC]] violation: VEF JDA-10M.jpg|VEF JDA-10M -->
VEF J-12 IoM.png|VEF I-12
ВЭС ГЭС.jpg|[[Ķegums Hydroelectric Power Station]]
Bundesarchiv Bild 183-S34745, Tallin, Treffen der baltischen Aussenminister.jpg|[[Baltic Entente]] meeting, 1937
Bundesarchiv Bild 183-E07262, Berlin, Nichtangriffspakt mit Estland und Lettland.jpg|Latvian, German and Estonian ministers sign non-aggression treaties, 1939
</gallery>