Today I want to tell you about ‘tulipomania’, which manifested in the Netherlands in the seventeenth century. It’s a great example of how people can become spectacularly detached from reality, and just as quickly, come back to their senses again.
The seventeenth century was a golden age for the Dutch. They were newly independent from Spain and had massively increased their overseas trade. Merchants working with the newly formed Dutch East India Company could expect to make a 400% profit on a single voyage. There was a lot of money in the Netherlands and people wanted to show off a bit with their wealth. They built themselves grand houses and surrounded them with flower gardens. Growing plants that weren’t meant for either eating or for medicine really showed everyone you had money to burn.
Tulips were first imported to the country from Turkey in the middle of the sixteenth century. There were no other flowers to match their intense colour. By 1593, they had become very popular. Tulips usually came in red, yellow or white, but there were other, rarer kinds that were multicoloured, white with flame like markings in pink (rosen) or purple (violetten). Then there were the bizarden, white or yellow streaks against a background of red, purple or brown. Often, the edges of the petals were frilled. These were known as broken tulips; not because they thought there was anything wrong with them, they thought they were very beautiful and they were the most highly prized of all. But there was something wrong with them. The unusual colours and frilly petals appeared because the bulbs were infected with a virus called the ‘mosaic virus’.
People were willing to pay higher prices for the bulbs that produced these flowers, but the virus meant that the bulbs were weakened and didn’t produce so many offsets (new bulbs). So they were rarer. That made them even more expensive and even more sought after. Unfortunately in the Netherlands in the mid 1630s, the tulips weren’t the only thing that was afflicted by disease. There was also a massive outbreak of bubonic plague. What with everyone thinking they might die at any moment, they rather threw caution to the wind and things started to get a bit out of hand.
Towards the end of 1636 people started to offer to buy bulbs that were still in the ground. Tulip bulbs are planted in the autumn, flower in the spring and the bulbs can be lifted, dried and sold in the summer. In the winter of 1666, people began to make offers to buy the bulbs, subject to seeing them flower in the spring. They made ridiculous offers and then they sold the bulbs, that they hadn’t yet bought or even seen, on to other people for even more money. The already expensive price of a tulip bulb doubled, then tripled and continued to rise. Much of the buying and selling of the bulbs took place in taverns in the city of Haarlem but there were markets in other towns too. The rather imaginary tulip bulbs could change hands up to ten times a day, the cost rising with each transaction. Prices got out of control because no one had to pay up all the money immediately. All they had to come up with was a 2.5% deposit. That money was generally spent on a round of drinks for everyone in the tavern, which didn’t really help anyone look at the whole thing sensibly.
People who didn’t have enough ready money started to offer goods, services, property in exchange for a tulip bulb. At the height of tulpiomania, bulbs were priced at 3,000 guilders, 5,000 guilders, 10,000 guilders. To put this in some sort of perspective, a skilled craftsman might, at that time, have earned 300 guilders in an entire year. You could have bought a small house for 1,000 guilders. It was entirely insane. It couldn’t last. A collapse was inevitable. On February 3rd 1637, in Haarlem, people just suddenly stopped bidding. Maybe someone came to their senses and everyone followed suit. They wouldn’t bid at the prices they had offered only the day before. The news spread to other towns, and suddenly no one wanted to buy. Everyone was trying to sell. The price of tulip bulbs dropped like a stone.
A man called Charles Mackay wrote a very colourful account of tulipomania in his book ‘Extraordinary Popular Delusions and the Madness of Crowds’ in 1841. He would have you believe that everyone in the Netherlands, from the highest to the lowest was caught up in the tulip trade and were ruined by it. He also tells the story of an unfortunate sailor who accidentally ate a valuable tulip bulb, mistaking it for an onion. Probably neither of these are true. Tulip bulbs are not very nice to eat, in fact they can be poisonous if you don’t take the middle out and I don’t recommend it. At the end of the Second World War, many Dutch people were forced to eat tulip bulbs because they had nothing else. They do not remember it fondly.
There is no real evidence that many people were financially ruined in the winter of 1636/7. Not much money changed hands. Even the growers didn’t lose out, because if people declined to pay, they still had their tulip bulbs. In fact, people abroad became so fascinated with the bulb that had caused so much trouble that they wanted to see the tulip for themselves. This led to a large export business in flowers which is still working out pretty well for the Dutch today.