Tulip mania – when flowers buy a home in the Netherlands

In the seventeenth century the world experienced one of the first major financial bubbles in tulip mania.

Tulip mania occurred in the Netherlands in the seventeenth century, beginning around 1624 and reaching its peak between 1636 and 1637.

Although the prevalence of tulip mania is still largely debated, it is undeniable that the price of tulip bulbs has risen to terribly high levels – with one tulip bulb often worth more than the annual wage of a skilled trader!

Why did the Dutch lose their mind about tulips?

The color and variegated patterns of the tulip, originally imported from the Ottoman Empire (now Turkey), did not resemble anything that Dutch gardeners saw in the seventeenth century, as tulips were richer and more spectacular in color than European flowers.

Dutch culture soon became fascinated by tulips and the garden became a symbol of status and wealth.

Another factor that explains why the Dutch tulip mutation occurs is the life cycle of the tulip itself itself.

The mother bulb of the tulip lasts only a few years and can only produce two or three identical copies per year.

It also takes approximately seven years to grow a tulip to maturity starting from the seed.

Because of these two factors, the ability to provide tulips was minimal, while demand rose significantly, which means that tulips prices also rose significantly due to the sharp rise in the market between supply and demand for tulips.

How much were tulip bulbs worth?

Throughout the thirties, the price of tulip bulbs rose steadily as more people, mostly wealthy vendors and merchants rather than members of the nobility or traditional investors, entered the flower market.

Since it was a market run mostly by independent traders rather than nobles, tulips were usually traded on the streets, pubs, or even at auctions, rather than on the Dutch stock exchange.

By 1636, even the lowest or most common quality tulip bulbs were worth a small fortune, with an average price of about 160 guilders, rising to 200 guilders at the height of the tulip madness.

Although difficult to estimate, the average merchant brought home about 150 guilders a year.

During the height of tulip mania, most of the bulbs were passed from one buyer to another just for profit without being transplanted at all, and some even passed through up to 10 different sellers per day.

The most famous incidents of tulip mania.

The most famous incident showing tulip mania was when seven orphaned children auctioned off their inheritance from their deceased father.

This inheritance consisted of 70 tulip bulbs, including those of the incredibly rare Violetten Admirael van Enkuizen species, which sold alone for 5,200 guilders.

The total auction was 53,000 guilders, all for 70 follicles.

In 1635, 40 bulbs were sold at different auctions for 100,000 guilders. Just to iterate, the typical skilled trader was earning approximately 150 guilders per year.

Tulip bulbs were good for trading as well.

It was also known during that time that tulip bulbs could be traded for commodities rather than sold entirely.

There is one specific example of a very rare tulip bulb bartered for four fat bulls, eight fat pigs, twelve fat sheep, two barrels of wine, four boxes of beer, a thousand pounds of cheese, two tons of butter, a bed, a glass of silver, a set of fancy clothes, two feet of wheat, and four feet of rye.

The cost of all this was estimated at about 1500 - 2000 guilders!

There have also been many abundant cases of tulip bulbs being used for the purchase of houses, land or farms, with one Semper Augustus bulb in a known case trading for 12 acres of farmland.

The fall of tulips...

As all the financial bubbles grow, they also burst.

And the tulip mania bubble burst strongly.

It all started in the city of Harlem at a routine tulip auction when an investor did not show up to pay for the tulips.

This led to concern in the market about the fact that no one was buying tulips to actually get tulips, everyone was simply buying them to transform and sell them.

Within days the panic spread widely and the tulip market began to collapse on itself.

Within weeks, tulips are now worth less than 1% of the prices they once deserved.

Despite the severe collapse of the tulip market, the repercussions were not so significant.

Since most of the trading took place on the main street and not on the stock exchange or among the nobility, the Dutch economy in general was not much affected by the tulip bubble burst.

National Tulip Day

Tulips are still synonymous with Dutch culture, and in the Netherlands the third Saturday of each January falls on what is known as the "Nationale Tulpendag", or National Tulip Day for English speakers.

To celebrate the day, Amsterdam's Dam Square is filled with around 200,000 tulips in a lavish display.

People travel from all over the Netherlands and the world to see these flowers and stand in queues so they can choose some to take with them.