According to "Flags of All Nations" by Cleveland H. Smith and Gertrude R. Taylor 
(Thomas Y. Crowell Co., New York, 1946; pg.101): 

"The Letts used the juice of berries to make the crimson for their original flag. 
Latvian poets say that the red in the flag indicates the readiness of the Latvians 
to give blood of their hearts for their freedom, which was represented by the white 
in the flag."