Tulips

The question I have to ask myself is whether I would sell my house for the bulb of a flower in the hope that in a few week’s time I could sell the bulb to buy a mansion. I’ll think about it.

In the meantime let’s have a look back to Holland in the early 1600s. The introduction of tulips to Holland in the latter part of the sixteenth century coincided with the fashion for the newly emergent middle and upper classes to keep gardens. Their gardens either adjoined town houses, or were in separate plots outside the city walls. This was a form of conspicuous consumption, a way in which the newly rich could display their wealth. Tulips were an exotic item from the East, newly imported at a time when global trade was just beginning to have an impact, of which the Dutch were leaders. In time other plants would be all the rage, but in the 1630s it was tulips.

The Dutch East India Company earned huge profits and their shares increased greatly in value. The demand for tulips soared, and in response the number of tulips available for sale rose accordingly; by the mid-1630s there were more than 500 varieties. Some perspective is given to the Dutch craze by the fact that France had already experienced its own tulip mania, where prices reached similarly unfeasible heights.

England did not experience a craze for tulips, but there are parallels with other fashionable plants in England, not least the orchid, for which there were weekly auctions in London in the Edwardian period. The author Rider Haggard tells of a Mr. Tracy, who was offered and refused seventeen hundred guineas for an Odontoglossum Crispum “Think of it! He refused the value of a good sized farm for that one frail and perishable plant!”

Tulip Mania - Jan Brueghel the Younger, 1640

The phenomenon later described as Tulipomania arose in the autumn and winter of 1636-37 when, according to the best evidence, very small offsets increased in price between four and ten times in the last three months of 1636 and large bulbs increased in price five fold. The demand for the tulip trade was so large by the end of that year that regular marts for their sale were established on the Stock Exchange of Amsterdam in Rotterdam, Haarlem, and other towns.

It was at this time that professional traders got in on the action and everyone appeared to be making money simply by possessing some of these rare bulbs. It seemed at the time that the price could only go up, that the passion for tulips would last forever. People had purchased bulbs on credit, hoping to repay their loans when they sold their bulbs for a profit.

However, the bubble had burst by the end of 1637. Buyers announced that they couldn't pay the high prices previously agreed upon for bulbs and the market fell apart. It wasn't a devastating occurrence for the nation’s economy but it did undermine social expectations. The event destroyed relationships built on trust and people’s willingness and ability to pay.

It should be said that there were no discernible bankruptcies amongst the participants and little or no effect on the wider economy. Remarkably, also, considering the scope for fraud, there seems to have been little or no criminal activity.

The Tulipomania story became notorious upon the publication in 1846 of Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay, which has never been out of print. His source was a series of three propaganda leaflets published anonymously in the aftermath of the events, in particular one entitled Dialogue between True-mouth and Greedy-goods. As the title suggests, it is a satire, and as it is in the very nature of satire to exaggerate to make a point, it would be unwise to rely on it as being necessarily true.

Much of the information above comes from articles by Jonathan Denby, Faculty of History, University of Oxford, Tulipmania: About the Dutch Tulip Bulb Market Bubble by Adam Hayes (Investopedia) and Doug Ashburn (Britannica Money).

No, I wouldn’t sell my house as I like my house and the area I live in. Anyway, if I had a mansion just think of all the cleaning.

I couldn’t resist this poem by Dylan Thomas:

The force that through the green fuse drives the flower

The force that through the green fuse drives the flower
Drives my green age; that blasts the roots of trees
Is my destroyer.
And I am dumb to tell the crooked rose
My youth is bent by the same wintry fever.

The force that drives the water through the rocks
Drives my red blood; that dries the mouthing streams
Turns mine to wax.
And I am dumb to mouth unto my veins
How at the mountain spring the same mouth sucks.

The hand that whirls the water in the pool
Stirs the quicksand; that ropes the blowing wind
Hauls my shroud sail.
And I am dumb to tell the hanging man
How of my clay is made the hangman's lime.

The lips of time leech to the fountain head;
Love drips and gathers, but the fallen blood
Shall calm her sores.
And I am dumb to tell a weather's wind
How time has ticked a heaven round the stars.

And I am dumb to tell the lover's tomb
How at my sheet goes the same crooked worm.

Thanks for reading, Terry Q.