Authors: Mike Dash
From this perspective, it is evident that the tulip trade really was not merely healthy but positively booming in Holland in the autumn and winter of 1636–37. Yet even as the mania reached its peak, there were disturbing indications that all was not well in the tavern colleges.
One warning sign was the florists’ restless search for novelty. Although most seem to have agreed that one or two varieties, such as Viceroy, stood apart from their many rivals, there was very little consensus as to which tulips deserved to stand in the second rank—a problem that was exacerbated by the considerable similarities that existed between many of the more popular flowers. One college or town favored one variety, others another; furthermore, fashions and opinions changed, and new tulips continued to come onto the market to challenge the established favorites. Because of this the trade in
bulbs was not just unstable but inherently illogical. No market can flourish for long if it does not possess elements of stability and predictability. The Dutch tulip trade had neither.
A notorious example of the florists’ restless desire to find something new and different was the quest for the black tulip, a flower of such fabled rarity that it would certainly have been worth considerably more than even Semper Augustus if only an exemplar could have been found. The French novelist Alexander Dumas even wrote a novel titled
The Black Tulip
, in which a young physician named Cornelius van Baerle seeks to win the huge prize offered to the first man to grow such a flower. Dumas was most likely inspired by an old Dutch account of an incident that allegedly took place at the height of the mania. According to one version of this story, a syndicate of Haarlem florists heard that a cobbler living at The Hague had succeeded in breeding a black tulip and determined to purchase the solitary flower that he possessed. They visited him in his shop, and after a certain amount of bargaining, the cobbler agreed to accept fifteen hundred guilders for his tulip and handed over the bulb. To his complete astonishment the Haarlem florists immediately hurled the black tulip to the ground and trampled on it, exclaiming: “Idiot! We have a black tulip too, and chance will never favor you again. We would have given you 10,000 guilders if you had asked it.” Assured that their own bulb was once again unique and therefore priceless, the Haarlemmers returned to their city, leaving the unfortunate cobbler so distraught at the thought of the wealth that might have been his that he hanged himself the same night.
The story of the black tulip is, of course, a myth. Indeed the botany of the genus is such that it is actually impossible to breed a flower with pure black petals; even today the handful of “black” tulips that exist are merely an exceptionally dark shade of purple. Nevertheless, the fact that the black tulip legend achieved a certain currency during the years of the tulip mania might perhaps have
alerted the more astute florists to the fact that a dangerous gap was beginning to develop between ever-increasing demand in the bulb market and what growers could actually supply, given the time it took to introduce a new variety and the limited stock of botanical tulips available.
Still more worrisome was the boom in the market for pound goods that occurred in the autumn of 1636. The astonishing prices being asked for these previously worthless bulbs by the beginning of 1637 should have given any florist pause. However high the prices of superbly fine tulips rose, there was always some justification for them. Throughout the mania years there remained a small but genuine demand for such bulbs from the old tulip connoisseurs—the only people who actually wanted to plant and grow the bulbs rather than simply trade them. No such demand existed in the case of pound goods. Connoisseurs would not touch them, and most college florists were not remotely interested in actually cultivating them. They were traded solely because they were available, and by early February even devoted tulip maniacs began to be uneasily aware that their market was running out of control.
The success of the auction at Alkmaar did provide some reassurance that high prices were still being paid for bulbs, but even so, a few of the more cautious dealers must have begun to wonder just how much longer tulip prices could continue to rise. Here and there an isolated florist sold his holdings and declined to reinvest his profits in yet more bulbs. In the tavern colleges dotted across Holland, rival traders looked on and wondered if the seller knew something they did not. Perhaps, they thought, they might dispose of a bulb or two themselves.
It was the first week of February, 1637. The boom time was over.
T
he great crash in tulip prices began in Haarlem on the first Tuesday of that February, when a group of florists gathered to buy and sell as usual in one of the city’s tavern colleges.
As was customary, an established member of the college began the day’s trading by testing the state of the market; he offered a pound of Witte Croonen or Switsers for sale. The florist asked a fair price—1,250 guilders—for the bulbs, and in the normal course of events he would have found several eager buyers. Slates and chalk would have been distributed, the tulips would have been knocked down to the highest bidder, and the rest of the day’s trading would have continued in its usual frenzied way. On this day, however, there were no bidders for the bulbs at 1,250 guilders. The auctioneer offered them again, this time cutting the price to 1,100 guilders. Still there was no interest. Desperately now, he offered his bulbs for a third time, dropping his price to a risible thousand guilders the pound. Once again there were no bids.
It is easy to imagine the awkward silence that must have descended upon the group of florists hunched around their table in
the tavern as this awful, farcical auction ran its course: the half-drunk tankards of beer hanging in midair, partway to the lips of drinkers who suddenly understood the importance of what was happening in front of them; the nervous glances exchanged by traders who had not the slightest idea what to do next or how they were supposed to react. The silence must have lingered for a second or two and then been broken by a swelling hubbub of anxious conversation as bedlam enveloped the college and every florist present started talking at once.
In all likelihood every one of the traders present had paid similar prices for similar bulbs within the past few days in anticipation of selling again for another handsome profit. Now, in a matter of no more than a minute or so, their assumptions had been shattered. The ugly question of what would become of the bulb trade had been raised. Plainly it would have been impossible to continue with the normal business of the day. Perhaps some brief attempt was made to sell other bulbs, without success, but the college must have suspended trading almost immediately, and in the general confusion one or two of the assembled company no doubt ran to inform their friends and family of what had occurred. In no time all the colleges in Haarlem would have heard the news, and every florist in the town and beyond the walls would have been gripped by a simple impulse: Sell.
It took only a few days for the panic to spread through the rest of the United Provinces. In college after college and in town after town, desperate florists discovered that flowers that had been worth thousands of guilders only a day or two before now could not be sold for any price. A few dealers kept their heads and tried to stimulate renewed interest by organizing mock auctions or offering bulbs at huge discounts, but they were ignored. In most places the tavern trade crashed so completely that it was not even a question of prices falling to a quarter or a tenth of what they had been when the mania was at its peak. The market for tulips simply ceased to exist.
Many florists must have found themselves in the same plight as Gaergoedt, the weaver described by the author of the
Samenspraecken
. Caught out by the unexpected fall in prices, Gaergoedt’s first reaction is to go out to buy and sell again. He retains some of his old confidence, telling his friend Waermondt: “Flora may be ill, but she will not die.” While his wife, Christijntje, bewails her husband’s decision to sell off his loom and all his weaving tools, Gaergoedt returns to the colleges, only to find that the market really has collapsed and all trading has come to a halt. Unable to find a single buyer for his bulbs, and conscious of the many debts he has incurred in buying tulips and laying out a garden, the hapless weaver asks his friend what he should do. Waermondt’s advice is brutally straightforward: The tulip trade is dead, he says, there is no chance of reviving it, and the florists have no option but to return to their old jobs and their proper stations. The best they can hope for is to be given the opportunity to discharge their debts honorably.
Confidence is everything in a booming market, but the fact that the tulip trade collapsed so rapidly suggests that some of the less sanguine florists must have been feeling uneasy about the continual escalation of bulb prices a few days before the crash. The mania took place before the introduction of daily newspapers, so there is no way of being certain of the sequence of events in the final week of January and the first few days of February, but it is unlikely that bulb dealing ceased completely and without warning simply because of one failed auction in a single Haarlem college. Trading must surely have become more and more difficult everywhere in Holland over the previous week or so; auctioneers would have found it harder and harder to push prices up at the old rapid rate, some varieties would have peaked in value, and the number of dealers anxious to sell would have begun to outnumber those still willing to buy. In the day or two before the fateful meeting at Haarlem, it is not too fanciful to suppose that a general feeling of unease and trepidation must
have descended upon the colleges of Haarlem and Amsterdam like a clammy autumn fog rolling in off the Zuider Zee. The tulip traders had been waiting for something to happen, and now it had.
Certainly rumors that the markets could rise no higher were already in the air before February 3, and some buyers were no longer confident that their investments would yield a profit. As early as the end of December, an apothecary and bulb grower named Henricus Munting, who lived in the town of Groningen, was able to complete a lucrative deal to sell a handful of his tulips for seven thousand guilders to a man from Alkmaar only by promising his nervous customer that if prices fell before the summer of 1637, he could cancel the purchase and pay no more than 10 percent of the agreed price. Then, two days before the crash, at a dinner party held at Pieter Wynants’s house in Haarlem, Pieter’s younger brother Henrik tried to badger one of the guests into buying a pound of Switsers for 1,350 guilders. Henrik’s target was a rich widow named Geertruyt Schoudt, but she demurred and could not be persuaded to buy. It was only when another dinner guest, a local dyer named Jacob de Block, offered to guarantee the price for eight days that Schoudt gave way and bought the bulbs.
The collapse of the tulip trade after February 3 was so complete that virtually no information has survived concerning the sort of prices paid for bulbs in the spring of 1637. It would appear that the only buyers left in the market were the connoisseurs and perhaps a few rich florists who were not entirely dependent on flowers for their wealth, and that only the rarest and most superbly fine varieties had any chance at all of being sold. According to one contemporary, a tulip that had been worth 5,000 guilders before the crash was sold later for only 50 guilders. In May a bed of tulips that would have fetched 600 to 1,000 guilders in January is said to have changed hands for 6 guilders, and a selection of bulbs worth about 400 guilders during the boom was sold for a mere 22 guilders one stuiver.
These prices suggest that where tulips could be sold at all, they fetched, at best, just over 5 percent of their old values, and often 1 percent or less. There can be no doubt, then, that this was a truly spectacular crash. Even if it was not more or less instantaneous in each of the towns affected by the mania—and it probably was—the collapse of the tulip trade certainly cannot have taken more than three or four months. It was far more rapid and complete than history’s most notorious financial disaster, the Wall Street Crash of 1929 and the Great Depression that followed it. In that case it took more than two years for share prices to fall to a low, and even then they retained 20 percent of their old value.
Amid all the confusion few florists seem to have understood exactly why the bulb trade had collapsed in such spectacular fashion. Yet in retrospect it is not difficult to see that the crash was all but inevitable. Like a sun, tulip mania burned brightly and steadily while there was still fuel to feed it in the shape of a steady supply of bulbs. But during the winter of 1636–37 demand for tulips comprehensively outstripped supply, and the mania then began, in effect, to consume everything around it. Pound goods and unicolored tulips were pressed into circulation, and in a market where even the hitherto despised Switsers and Witte Croonen were selling for more than a thousand guilders a pound, the florists of Holland were dealing every last bulb they could lay their hands on.
Once even these
vodderij
were being traded, there were no longer any new varieties coming onto the market at affordable prices. The absence of cheap bulbs meant, in turn, that it was all but impossible for more novice florists to enter the market, for who could afford to do so if the very cheapest lots were selling for dozens or even hundreds of guilders? A handful of the existing traders were even selling up and trying to take their profits, so a shrinking group of florists, possessed of only a limited amount of capital, were somehow sustaining a constant rapid rise in prices. Sooner or later even those who
still believed the trade was fundamentally healthy would become unable to afford the next price rise and hesitate to commit themselves. Thus, by the beginning of February, money and bulbs—the twin fuels of the flower mania—were both exhausted. And like a sun that has burned the last of its fuel, the tulip mania “went supernova” in a final, frenzied burst of trading before collapsing in on itself.