When is one considered a failure?
The history of the flower bulbs in the Netherlands is still fascinating today. Many people immediately think of the infamous tulip fever, the speculative bubble during the Dutch Golden Age. The value of tulips rose and rose - and so happened in 1637 what had to happen: the market collapsed. The first financial bubble in history was there. It wouldn't be the last - not even in the flower bulb trade.
Today this event is viewed as a huge failure in the tulip trade in the early 17th century. One speaks of the so-called tulip fever and that is anything but positive. As you read this story, you will find yourself wondering if it wasn't clear to those involved then that something was going wrong? Obviously not, and obviously that's why it could happen that way. Ironically, the whole story got off to a bad start - it all started with a crime. The tulips that Carolus Clusius had collected in the botanical garden of Leiden were stolen.
Breeding and Hybridization
In some parts of the world, tulips were already very valuable back then. Their beauty was compared with precious stones, which is why wealthy lovers created large collections of tulips. The first collection in the Netherlands was built by the scientist Clusius, whose motivation was not wealth, but knowledge. However, people with other intentions knew how to locate the tulips in the city of Leiden. Stealing them promised to be very lucrative ...
Offering stolen tulips would have caused quite a stir even then. They were therefore not immediately resold, but instead one began to grow the tulips. Small bulbs were planted and the seeds were crossed. The fully grown tulips quickly found admirers. There were specific mutations, new types, new colors, new "gemstones" - collectors would pay a lot of money for them! The crime was worth it.
Tulip trade and bar auctions
Rare tulips were usually sold in secret because collectors valued their privacy. Collecting was very fashionable in the early Golden Age. The wealthy stratum liked to spend their money on luxury goods. However, as prosperity continued to grow and people had more money than they could spend on luxury, people began to invest their money too. In the Golden Age, modern capitalism emerged and it should immediately show its bad side - in the form of the famous tulip fever, the first bubble, the first capitalist virus.
“One man's death is another man's bread” - this Dutch proverb describes the situation that prevailed in the Netherlands at the beginning of the 17th century. The plague caused many deaths, which is why many people cashed in considerable inheritances. Young daredevils suddenly got rich and decided to invest their money in the tulip trade. Tulips were no longer viewed as a collector's item but as an investment. Because tulips would keep increasing in value - right?
That sounds less like a smart investment, but more like a pleasure in spending money. So it is not surprising that the tulip trade mainly took place in pubs and inns - with fresh beer and genever. The investors encouraged each other to keep investing. Those who could spend more than the other did too - if only to impress their friends in the pub. So the tulip trade became a "tulip fever". The pub auctions spread like a virus. The nouveau riche invested until their wallets ran out in hopes that their investment would pay off.
The tulip virus was literally a virus, but that was not known at the time. The intensive cultivation of the tulips made them susceptible to disease. Viruses changed the color of the tulip flowers and created a very interesting, marbled pattern. But the sick tulips could not be multiplied. Investing in such a tulip was completely worthless. However, because they didn't know any better and because they wanted to keep up with other investors, many people invested in the virus-infected tulips.
Tulips as valuable as houses
Investors bought tulips without even seeing them. They bought a promise, a piece of paper that promised beautiful flower bulbs for the next season. Most of these promises simply did not come true because the rarest tulips could not be propagated because of the virus. But the bar-goers continued to invest. The price of tulips skyrocketed. In the town of Hoorn, a whole hostel for three tulips was sold. Eventually a single tulip became worth as much as a canal house. It couldn't go on forever!
The bubble bursts
In February 1637, tulip prices fell for the first time in years. The investors ran out of money and the promises could not be fulfilled. The first unsuccessful auction took place in Haarlem. The bubble later burst in Alkmaar, Hoorn and other Dutch cities. Buyers could not meet their payment obligations, sellers could not deliver. They had sold nothing to each other but empty promises. The trade was pure speculation.
Fortunately, investors weren't punished too severely. A buyer was not asked to pay his debt until the seller could meet his obligations. Courts no longer accepted cases involving tulips. By doing nothing, the judges prevented many bankruptcies. The tulips were still grown. Although the tulip trade was ridiculed by poets and comedians, prices eventually stabilized and tulip growing became a respectable industry.
Speculative bubbles after the tulip fever
The hype that arose about tulips could, among other things, arise because it was a completely new product. Tulip bulbs were previously completely unknown in the Netherlands, which is why no one could realistically assess their value. And so this was not the last speculative bubble in the history of flower bulbs. In the 18th century, hyacinths became fashionable and a new bubble emerged, which burst in 1737 - exactly a century after the tulip fever. More recently, lilies and gladioli have been the subject of speculation. In other industries, too, things followed a similar pattern: at the beginning of the 21st century, for example, the new Internet caused a bubble.
Discover the history of the tulip at Fluwel
We would be happy to tell you more about the history of the tulip - in the Land van Fluwel, our family-friendly theme park, which is entirely dedicated to the tulip. Follow the long journey of the tulip and experience the madness of the tulip fever between reconstructed canal houses.
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