Tulip Fever

The great commodity crash of 1637

Fortunes were doubled in the blink of an eye. Poor men became rich, and rich men became filthy rich — without doing a day’s work.
In the wildly speculative marketplace, even the threat of government crackdowns couldn’t halt the illegal trading of the hottest commodity in 17th century Holland — tulip bulbs. When the middle classes began to realize how much money the upper classes spent on tulip bulbs — and how much money they made selling them — they sensed a “fool-proof” get-rich-quick opportunity.
Thus “Tulipmania” was born.

Originally a wild flower tamed by the Turks, cultivated tulips came to Holland by way of Carolus Clusius, director of the Royal Medicinal Garden in Vienna, who successfully raised the first European tulips during the 16th century. He fled to Holland for religious sanctuary, where he became director of the botanical garden at the University of Leiden. He took his tulip bulbs with him. Both thrived in the Dutch climate and an industry was born.
By the 17th century, horticultural experimenting created many new breeds of tulips. Available only to the rich, these exotic and expensive mutations were coveted for their beauty, rarity and status. When the middle classes began to realize how much money the upper classes spent on tulip bulbs, and how much money they made selling them, they sensed a “fool-proof” get-rich-quick opportunity.

Bulbs were sold by weight, usually while they were still in the ground. All one had to do to become rich was to plant them and wait. The buying and selling of a product as invisible as un-sprouted flowers came to be called the “wind trade.” Traders could earn as much as 60,000 florins in a month. Not a bad commission even by todays standards. At one point, a single ‘Semper Augustus’ bulb could command nearly 3,000 Dutch guilders. Just a short time later, a similar bulb fetched a whopping 4,500 guilders plus a horse and carriage! Those with a mania for tulips never let empty pockets sour a sale. One early 17th century bill of sale recorded the following transaction for a single tulip bulb: two loads of wheat; four loads of rye; four fat oxen; eight fat swine; twelve fat sheep; two hogsheads of wine; four barrels of beer; two barrels of butter; 1,000 pounds of cheese; a marriage bed with linens; and a sizeable wagon to haul it all away. The equivalent “cash” value of all that merchandise totaled 3,000 guilders, which at that time was the price of a large house!

People were desperate to cash in on the bulb-trading frenzy! Small businesses were sold and family jewels traded. Local governments tried unsuccessfully to outlaw this commerce, but like any profit boom, trade was legislated by economics, not government. The bottom fell out of the market during 1637, when a gathering of bulb merchants could not get the usual inflated prices for their bulbs. Word quickly spread, and the market crashed. Thousands of Dutch businessmen, many among the country’s leading economic powerbrokers, were ruined almost overnight.

To find the highest price paid for tulips, however, one has to leave Holland for Turkey. According to Sam Segal in “Tulips Portrayed,” in 1730 Sultan Ahmed III was brought to trial for crimes including “having spent too much money on the traditional annual tulip festivals.” The sentence: beheading. It was the ultimate price paid for the ultimate symbol of beauty in a spring garden.