Weird and wonderful members of the plant kingdom - Tulip Disasters

In 1559, the first tulip bulbs travelled from Constantinople to Holland and became a craze. Tulip bulbs swiftly became a status symbol for the wealthy, on the basis that all status symbols arise: because they were beautiful and hard to get - like diamonds or rare artworks. Although early buyers were people who truly prized the flowers, later buyers were merely in for the money. As with any other fad, speculation in value created trading activity, and eventually, tulip bulbs were placed on the local market exchanges - think eBay with clogs. By 1634, the rage for owning tulips had spread to the middle classes of Dutch society. Merchants and shopkeepers began to compete to own, or invest in, individual tulip bulbs.

How bad did it get? Well, at the height of tulip mania in 1635, a single tulip bulb was exchanged for:

• four tons of wheat and eight tons of rye
• one bed
• four oxen, eight pigs and twelve sheep
• one suit of clothes
• two casks of wine and four tons of beer
• two tons of butter and 1,000 pounds of cheese
• one silver drinking cup

All of which would add up to nearly £19,000 in modern money. People were selling everything they owned for the privilege of owning tulips, on the expectation that the bulbs would continue to grow in value. As a result, prices, converted to modern currency, ranged from £9,000 all the way up to £35,000 for a single bulb. By 1636, Tulip notaries and clerks were appointed to record transactions, and public laws and regulations were developed to control the tulip craze. But in 1636, some people began to liquidate their tulip holdings. Tulip prices began to weaken, slowly at first, and then rapidly. Confidence was destroyed, and panic seized the market. Within six weeks, tulip prices crashed by 90%. The Dutch government refused to interfere. Instead, it simply advised tulip holders to agree among themselves on some plan to restore public confidence, but tulip prices continued to fall. Next, the council in the Hague was asked to stabilise tulip prices, but their efforts failed and prices slumped again to less than the present equivalent of fifty pence each. Imagine having bought a tulip for £35,000, only to discover six weeks later that it was worth less than a quid! Commerce in Holland suffered a severe shock, and did not recover for many years.

Tulip photograph by speed42, used under a creative commons attribution licence