Inflation Phenomenon Where Allowances Surpassed Base Salaries
After World War II, Taiwan experienced severe economic weakness and price controls, leading to hyperinflation. The cost of living fluctuated daily, with annual price increases ranging between 500% and 1,200%. In response, on June 15, 1949, the Taiwan Provincial Government implemented the "New Taiwan Dollar Issuance Regulations" to reform the currency system. The regulations authorized the Bank of Taiwan to issue the "New Taiwan Dollar" (NTD), which was exchanged at a rate of 40,000 old Taiwan Dollars (OTD) to 1 NTD.
A record from the Daxi branch dated July 1948 illustrates this situation. Manager Wu's Dewang base salary was 220 OTD, but his living allowance was an astonishing 43,522 OTD. This significant disparity highlights the period of hyperinflation, where wages could not keep pace with skyrocketing prices, resulting in living allowances vastly exceeding base salaries.
