Part 4: Tulip Mania!
The Tulip rapidly grew in popularity following its introduction to the Netherlands, its vivid colors being unlike any other flower available at the time.
As a newly independent Holland experienced a surge in economic prosperity, unique or 'nonpareil' Tulips started to appear as status symbols, with the extremely rare 'broken' Tulips - those with yellow or white flame-like streaks - rapidly becoming a coveted luxury item.
Growers of these bulbs gave them names reflecting status and nobility, such as Semper Augustus and Viceroy (two of the most famous Tulips in history). It would not be until the twentieth century that scientists discovered that the beautiful streaks were actually the result of the 'Tulip Breaking Virus', which gradually weakened the bulb with each new generation (and sadly helped drive many of these once exalted species to extinction).
As the flowers grew in popularity, professional growers began paying higher and higher prices for bulbs. By 1634, due to ever-increasing demand, speculators began entering the market hoping to buy low and sell high.
In 1636, the Dutch created a 'futures' market. While bulbs were dormant underground (and unable to be moved without killing the flower), people could buy and sell contracts for bulbs that would be blooming in the Spring. As interest continued to grow, these contracts could change hands dozens of times before the bulbs themselves were even out of the ground.
By November of 1636, even the price of common, 'unbroken' bulbs began to rise as every Tulip variety started to be seen as unique. Some speculators made fortunes by buying in then selling for huge profit, driving more and more to buy into the costly contracts in hope of future riches.
Tulip Mania reached its peak during the winter months of 1636-1637, with reports of contracts changing hands as many as ten times a day. It can be difficult to accurately compare prices to today, but the list below offers some insight into the value of different products and earnings:The basic unit of currency in Holland at the time was the guilder, each made up of 20 stuivers:
|Cost of a large mug of beer
Cost of a 12-pound loaf of bread
Daily wage of an experienced bleacher
Daily wage of a cloth-shearer
Cost of one barrel of herring
Cost of 40 gallons of French brandy
Annual earnings of a carpenter
Carolus Clusius' salary at the University of Leiden
Typical yearly earnings of a mid-level merchant
Rembrandt's fee for his greatest painting, The Night Watch (1642)
Typical yearly earnings of a well-off merchant
Highest reliably attested price paid for a Tulip bulb (1637)
Another, more disputed source comes from Charles Mackay's book 'Madness of Crowds' in which he recounts an offer of 21 acres of land for a single Semper Augustus bulb.
Unfortunately for the many buyers, it would not last. In February of 1637, as Spring blooms approached (and at which time the contracts would finally be exchanged for physical bulbs), prices suddenly plummeted. Potentially driven by plague concerns, buyers for the first time failed to show up to an auction in Haarlem. Concerned that they would be unable to find purchasers, speculators began to frantically sell off their contracts at discounted prices in the hopes of minimizing losses. Almost overnight, the bulb trade ground to a halt, with many left holding near-worthless contracts.
In the following years, prices returned to normal, and Tulip Mania became the subject of not only economics classes but also of satire, such as in the below painting by Jan Brueghel the Younger (ca. 1640) depicting the speculators as uncivilized monkeys in noble dress.
Fortunately, the collapse would not be enough to ruin the beautiful Tulip. It not only recovered, but remains extremely popular today.