The Monopoly in Taiwan and the 2-28 Incident

The first monopoly in Taiwan was established in 1897 over opium. It eventually extended to salt, camphor, tobacco, spirits of the Japanese era, these monopolies were a major revenue source for the Taiwan government, comprising 20% to 30% of its income.

Nationalist-appointed Governor-general Chen Yi held policies of “public ownership” and “market control”, continuing Japanese-style controls and continuing a monopoly once again on cigarettes, wine, matches, camphor, and weights and measures. Chen placed salt, charcoal, and sugar under stricter controls with his own monopoly bureau, eliminating any notion of free commerce. Under this tightly controlled economy, merchants had little room to tread, and small street vendors suffered even more.

The military and police under the Nationalist government were not known for their orderly conduct -- it was common knowledge that they had no qualms about using their guns to intimidate. It was also common for officials to ignore large-scale smuggling – but crack down on small-time street vendors. Many had their cigarettes confiscated by the police only to see them back in the market again. It was at this point where the angry Taiwanese decided that they had been bullied enough.