June 5, Festival of Popular Delusions Day. During the Great Tulip Mania, a tulip was worth more than a house

Some tulip bulb varieties were, briefly, the most expensive objects in the world in 1637.

“This is the greatest bubble story of all time… they call it the Tulip Mania.”- Gordon Gekko

 

According to Charles Mackay,  tulip mania swept the entire nation in the 1600’s:

“The population, even to its lowest dregs, embarked in the tulip trade”.

It may have been the first example of an economic bubble.

Tulip Mania: The First Bubble

 

A tulip could inexplicably go from producing single color blooms to showy flame-like colorful patterns.

This effect was actually the result of a virus.

But, in the 17th Century, flashy diseased tulips became more prized than healthy ones in the Dutch Republic.

Dutch botanists competed to breed ever more beautiful hybrids, known as ‘cultivars’.

In the early 17th Century, these cultivars began to be exchanged among a growing network of gentlemen scholars.

“As that network grew,” explains Betsy Wieseman, the curator of Dutch Flowers at the National Gallery, “it became less of a friendship network, and the scholars started getting requests from people they didn’t know. So they started trading for money. And as that network grew and grew, it became increasingly fragile.”

By 1623, 12,000 guilders – more than a smart Amsterdam townhouse– was offered for only 10 bulbs of the beautiful, and extremely rare, Semper Augustus.

It wasn’t enough to secure a deal.

To put that in context, a ton of butter cost around 100 florins, a skilled laborer might earn 150-350 florins a year, and “eight fat swine” cost 240 florins.

Tulips even began to be used as a form of money in their own right.

In 1633, actual properties were sold for handfuls of bulbs.

One (probably apocryphal) story goes that a  sailor mistook the valuable tulip bulb for an onion and grabbed it to eat.

The merchant and his family chased the sailor to find him “eating a breakfast whose cost might have regaled a whole ship’s crew for a twelvemonth”.

The sailor was jailed for eating the bulb.

 

Detail of Jan Brueghel the Younger’s Satire of tulip mania c. 1640.

At the peak of the tulip mania, thousands of people, including cobblers, carpenters, bricklayers and woodcutters, indulged in frenzied trading, often in smoky tavern backrooms.

(Drink was a significant factor in the generally excited mood.)

Some bulbs even changed hands up to 10 times during the course of a single day.

And then, overnight, the tavern trade disappeared.

In early February 1637, the market for tulips collapsed.

This was because most speculators could no longer afford to purchase even the cheapest bulbs.

Demand disappeared, and flowers tumbled to a tenth of their former values.

The result was the prospect of financial catastrophe for many.

Disputes over debts rumbled on for years.