Delanceyplace.com 10/27/08-Dutch Tulips

In today's excerpt--the Dutch tulip mania of the 1630s:

"The intense feeling of the Dutch for flowers can partly be explained by the geography of the Netherlands, whose flat terrain and rich soil provided the perfect ground for the cultivation of bulbs. ... Most prized of all flowers was the tulip (its name came from the Turkish tulipan, meaning a turban). ...

"Collectors classified the tulip varieties according to the coloring of their flowers and gave them splendid militaristic titles to reflect their position in the horticultural hierarchy. At the head of the bulbous troop came the Semper Augustus with its petals streaked in imperial purple, it was followed by Viceroys, Admirals, and Generals. ... The bulbs were relatively easy to cultivate, required little land, and there were no guilds restricting entry into the trade. Those who could not afford to purchase the expensive shares of the great joint-stock companies could instead wager on a bulb. ...

"The beginning of tulpenwoerde, or what the Victorians called tulipomania, is associated with the arrival in the tulip market around 1634 of outsiders who were apparently attracted by stories of rising prices for tulip bulbs in Paris and northern France. Among the entrants into the market--later dismissed by Dutch florists as the 'new entrants'--were weavers, spinners, cobblers, bakers, grocers, and peasants. ...

"No actual delivery of tulips took place during the height of the boom in late 1636 and early 1637 as the bulbs remained snug in the ground ... [and] a market in tulip futures appeared. Most transactions were expedited with personal credit notes and [one individual] boasted of having made 60,000 guilders from his tulip speculations but admits that he had only received 'other people's writing.' By the later stages of the mania the fusion of futures with paper credit created a perfect symmetry of insubstantiality: most transactions were for tulip bulbs that could never be delivered because they didn't exist and were paid for with credit notes that could never be honored because the money wasn't there. ...

"The average annual wage in Holland was between 200 and 400 guilders. A small town house cost around 300 guilders. ... Against these values we can measure the extravagance of tulip prices. ... A Gouda bulb of four aces (one-fifth of a gram) rose from 20 to 225 guilders; a Generalissimo of ten aces which had sold for 95 guilders fetched 900 guilders; a pound of plain yellow Croenen which sold for around 20 guilders rose in a few weeks to over 1,200. ...

"On 3 February 1637, the tulip market suddenly crashed. In Haarlem, the center of the flower trade, rumors circulated that there were no more buyers, and the next day tulips were unsaleable at any price. ... The collapse of Tulip Mania did not cause a national economic crisis. But many of the lower orders [of participants] were not so fortunate. Those who had mortgaged their properties and their chattels for a chance of quick gain must have suffered a permanent loss of wealth. ...

"In the aftermath of the crisis, tulipmania gave way to tulipphobia. The professor of botany at Leyden, Evrard Forstius, was said to be so incensed by the flower that he could not see a tulip without attacking it viciously with his stick."

Edward Chancellor, Devil Takes the Hindmost, Plume, Copyright 1999 by Edward Chancellor, pp. 15-20.