"Tulip fever" in Holland. "Tulip fever", or the history of the first financial pyramid (7 photos)

The “Tulip Crisis” that erupted in Holland in the 17th century is one of the first sufficiently described and documented economic crises in human history. In the winter of 1637, “tulip fever” was rampant in Holland. The demand for tulip bulbs and their value was enormous. This was the first example of a planned crisis in history and the experiment was clearly a success...

Tulips - a miracle of botanical gardens

In 1554, the envoy of the Austrian emperor in Constantinople, Ogier Ghiselin de Busbeck, noticed beautiful flowers in the garden of the Turkish Sultan, which amazed him with their grace. In the same year, the envoy purchased a batch of bulbs with his own money and brought them to Vienna, where they were planted in the garden of Ferdinand I.

The garden is run by the botanist Charles de Lecluse, known as Charles Clusius. He managed to create the necessary climate in the Habsburg garden, the flowers bloomed and they were able to be propagated.

News of this success reached the leadership of the university in the Dutch city of Leiden, where Clusius was appointed head of the university Botanical Garden. There, Clusius crosses different varieties of flowers to create varieties that are suitable for the colder Dutch climate.

Already in 1594, the first frost-resistant flower bloomed. Thus began what would later be called “tulip fever.”

Flower symbol

Beautiful and rare, the tulip is quickly becoming a new symbol of wealth, prosperity and belonging to a chosen society. Possessing it is coveted and prestigious.

Tulips from the early 17th century.

Its bulbs become a precious and highly desired gift. They are incredibly expensive. Sometimes, in order to buy them, you have to part with... a stone house.

"Florilegium" and the reason for the demand

In 1612, the Florilegium catalog published 100 varieties of the new flower. Where do so many varieties come from? It's all about... a virus (but this will become known only in the twentieth century).

In the meantime, the bulbs are growing, and, blooming, they give an endless number of variations - either stripes of different shades, then white spots, then some other speckles, or curly edges of the petals.

Royal European courts are beginning to take an interest in the new flower. Prices are rising, fueled by rumors that soon more and more people will become interested in the flower, and prices for it will rise more than once.

Ideal capitalist country

After a protracted war with Spain for independence, on the territory of the seven northern Dutch provinces, after a truce, a bourgeois republic was founded, which in a fairly short time began to occupy a leading position in shipbuilding and colonial trade - the leading economic areas of the 19th century.

Amsterdam is becoming a thriving industrial center. The main reason for this growth lay in the political system of the Netherlands, which guaranteed the bourgeoisie almost unlimited dominance in all areas of the economy.

Viceroy and Semper augustus - half a kingdom for a flower

So how much did the bulbs cost? In 1623, a Viceroy bulb costs 1,000 guilders. Is it a lot or a little? The average annual income of a Dutchman at that time was 150 guilders, and in order to buy just one onion he had to save for 7 or even 8 years.

A ton of butter cost one hundred guilders, and three hundred pigs cost 300. But the record was broken by the “Semper augustus” variety. There is a record of a transaction that says that for one bulb of this variety they give 6 thousand guilders! By the way, the most profitable bride was considered to be the one whose dowry included the “Semper augustus” onion.

Variegated tulips from the 1630s (leaftulip catalogfrom the collectionDutch Historical and Economic Collection). Right - “Semper Augustus”

Some deals are still amazing. In 1635 there were 40 tulip bulbs. sold for a fantastic sum at that time - 100,000 guilders. It was also not uncommon for one onion to be sold for several acres of fertile land, for a stone house, or for several hundredweight of wheat.

In addition, when selling, only part could be paid in guilders; the rest could be given in cows, wheat, butter, cheese or good wine.

Tulip fever gave birth to legends

One of them is about how a port tramp, seeing a ship entering the harbor, rushed to the office of its owner. The merchant, delighted by the news of the return of the long-awaited ship, selected the fattest herring from the barrel and rewarded the ragamuffin with it.

And he, seeing an onion on the counter that looked like a peeled onion, decided that herring was good, but herring with onions was even better, put the onion in his pocket and departed in an unknown direction.

A few minutes later, the merchant grabbed a tulip bulb Semper Augustus (“Eternal August”), for which he paid 3,000 florins. When the tramp was found, he was already finishing his herring and onions. The poor guy went to prison for theft of private property on an especially large scale.

"Allegory of Tulip Mania." PaintingBruegel the Youngerbased on a popular print, around 1640.

Another apocryphal story is about how Haarlem tulip traders heard about a Hague shoemaker who managed to breed a black tulip.

A delegation from Haarlem visited the shoemaker and bought all the black tulip bulbs from him for 1,500 florins. After which, right in front of the amateur tulip grower, the people of Haarlem rushed to furiously trample the bulbs and only calmed down after turning them into mush.

They were afraid that an unprecedented black tulip would undermine their well-established business. But the shoemaker could not bear the barbarity, he fell ill and died.

Winter tulips, stock exchanges and “air trading”

Tulips are a seasonal product. Before the “flower rush” began, they were traded from May to October. However, during the boom period, the winter seedling trade became popular.

Most traders tried to buy winter plants, because in the spring they could be sold for two, three, or even four times more expensive.

Trader and tulip lover. Caricature painting from the mid-17th century.

Demand grew, more and more Dutch people plunged into the new business. Trade in gold began to bring in less income than trade in flower bulbs.

Flower exchanges open in Amsterdam, Leiden, and Harlem. Not only live bulbs were traded there, but also ungrown “future” bulbs. In this way, deals were made for the future - people agreed to buy an agreed number of bulbs at an agreed time in the future.

Such transactions were called “wind trading” (from the English wind handel). So people began to sell their time, which is a sin for Christian culture.

Collapse

By 1634, half of all transactions on the market were “paper”, that is, for the future. Prices rose, the demand bubble inflated more and more, but in February 1637 the market “overheated” occurred. There were a huge number of bulbs, but there was no one else to sell them to. The price of bulbs instantly fell a hundred times, and then a thousand.

The market collapse hit the entire Dutch industry, since both it and the entire economy of that time were focused on tulips. A full-blown financial crisis began.

"Flora's Chariot" An allegorical painting by Hendrik Pot, circa 1640, a popular popular print mocking simpleton speculators. The carriage with the goddess of flowers and her idle companions rolls downhill into the depths of the sea. Behind her wander artisans who have abandoned the tools of their labor in pursuit of easy money.

The catalyst for the process was the futures mechanism - the same “wind trading” - which provoked first a sharp and increasing growth, and then an equally rapid decline.

Nationwide hysteria, an inflated demand bubble and the unreasonable value of investments led to the collapse. However, it was the memory of the “tulip hysteria” that helped the Dutch refrain from risky ventures in subsequent years and make up for lost time over the next 200 years...

The scientific publication Smithsonian published material stating that the “tulip fever,” which is considered to be the first stock market bubble, was invented by Dutch Calvinists. People were chasing profit, but not in such large numbers as is described in textbooks and works of fiction. And this race certainly did not cause the collapse of the economy and industry. We have prepared a Russian-language adaptation of this article.

General madness

Dynamics of the index of futures (green) and option (red) prices for onions in 1635-1637 according to Thompson. Image: Wikimedia Commons

For several decades, economists have used the story of “tulip mania” as an example of the dangers and instability of the free market. Writers and historians have written hundreds of books about the absurdity of events. A film was even made on this topic, it is called “Tulip Fever”, its plot is based on the book by Deborah Moggch.

There is just one small caveat: this story is not true.

To understand the truth, you need to understand history

“I always joke that the book should be called Tulip Mania: It's Boring Than You Think,” says Goldgar. “People love the legend because they think they can learn a lesson from it. I think this opinion is wrong."

Before putting the “tulip fever” on a par with the South Sea bubble, which happened in the 1700s in England, with the railway bubble of the 19th century, with the dot-com and bitcoin bubbles, it is worth studying a few of Professor Goldgar’s arguments and understanding what was happening in the Dutch society at the turn of the 17th century.

It's worth starting with the fact that the country experienced a major demographic shift during the War of Independence with Spain. During this period, merchants arrived in major port cities: Amsterdam, Haarlem, Delft and began trading, including the famous Dutch East India Company. This brought huge income to Holland, even despite the martial law in the country. The newly independent nation was led by an urban oligarchy of wealthy merchants, unlike other European countries of the era, which were controlled by the nobility. As a result, new faces, ideas and money helped revolutionize the Dutch economy in the late 16th century.

As the economy has changed, social interactions and cultural values ​​have changed. A growing interest in natural history and a love of the exotic among the merchant class caused prices to rise for goods from the east, including those from the Ottoman Empire. People of all social classes had to develop in new directions, which appeared with the influx of new goods. For example, a fish auctioneer created the manuscript “The Book of Whales” and this work allowed him to meet with the President of Holland. The Dutch botanist Clusius created the botanical garden at Leiden University in 1590 and the tulip quickly rose to a place of honor.

“Wild tulips, found in the valleys of the Tien Shan, began to be bred in Istanbul in 1055, and in the 15th century they already became symbols of the Ottomans. For example, Sultan Mehmed II had 12 tulip gardens, which required 920 gardeners to maintain,” writes Anna Pavord, gardening correspondent for The Independent online publication, in her book “Tulips.”

The Dutch discovered that tulips can be grown from seeds and shoots of the mother bulb. It takes 7 to 12 years for a seed to grow into a bulb and a flower to bloom. And an already ripe bulb can become a tulip in a year. Of particular interest to the botanist Clusius and the “tulip speculators” were “broken bulbs.” The petals of the tulips that grew from these bulbs were not monochromatic, but multi-colored. It was impossible to predict what the future flower would look like. Naturalists came up with ways to reproduce such bulbs and buds, as the demand for this rare species constantly grew. As it turned out later, this effect was obtained due to the fact that the bulbs hurt. They were frail and rarely produced flowers.

“The high market value of tulips, which authors studying “tulip mania” write about, was caused by the prices of especially beautiful “broken bulbs,” writes economist Peter Garber, “since it was impossible to predict what a flower sprouted from such a bulb would look like.” “Tulip mania could be described as a game of chance among growers who sought to produce buds of increasingly unusual colors.”

Printed report of the results of the auction in Alkmaar on February 5, 1637. Image: Wikimedia commons

Dutch speculators spent all their money on bulbs and then grew flowers, of which perhaps only one would make a profit. “As luxury goods, tulips fit well into the culture of big money and the new cosmopolitanism,” writes Goldgar. Tulips required expertise, experience in appreciating beauty and exoticism and, of course, a lot of money.

The beginning of a legend

“In reality, few people were involved and the economic consequences were not that significant,” writes Goldgar, “I could not find information in the archives about even one bankrupt. If there really was a massive destruction of the economy, as the myth says, it would not be difficult to find the data.”

These arguments do not mean that everything in the story about “tulip mania” is fiction. Merchants actually participated in the frenzied tulip trade and paid exorbitant amounts of money for a few bulbs. And when buyers were unable to pay traders as much as they had promised in advance, the market collapsed and caused a small crisis. But only because it subverted social expectations.

“In this case, the difficulty is that almost all market relations were built on trust. Buyers promised to buy the bulbs from the traders, and then said, “I don’t care that I promised to buy this. Now I don’t need this product.” The courts didn’t want to get involved and so there was no one to force people to pay for the goods,” says Goldgar.

But “tulip mania” did not affect all sectors of society and did not cause the collapse of industry. “The lack of data on bankruptcies makes it difficult to draw a firm conclusion, but the results of the study suggest that speculation in tulip bulbs was not as widespread and crazy as is commonly believed,” writes economist Peter Garber.

Who spread the myth?

“Some ideas are ineradicable, for example the one that God does not like cunning people and sends a plague on them. That's what people might have said in 1630, says Anne Goldgar, and the idea that cunning is a sin has survived into modern society. Pride comes before a fall."

Goldgar does not condemn directors and writers for misinterpreting the past. She is dissatisfied with the incorrect conclusions that historians and economists made in their works, further spreading the idea of ​​“tulip mania.” “I had no way of knowing that this story was a lie until I pulled up the old archives. It was an unexpected treasure,” says Goldgar.

Tulip mania(Dutch tulpenmanie) - a turbulent period in the history of Holland, when the demand for tulip bulbs began to exceed supply, and this product reached incredible prices (especially in the years 1634-1637).

Usually, little is written about this crisis of almost 400 years ago, but the history of Dutch tulips deserves more attention, especially since it is associated with “unreal money”. By the way, when reading about the tulip crisis, the question often arises: why did the tulip mania cover only Holland and not other European countries?

From Turkey To Austria

In the years 1555–1562, the Austrian envoy Ogier Ghiselin de Busbecq could be found in the Ottoman Empire. It was he who brought several tulip bulbs to Europe. Tulip bulbs that arrived from Constantinople to Vienna were planted in the garden of the Austrian Emperor of the Habsburg dynasty, Ferdinand I. They were looked after by Charles de l'Ecluse, a famous French botanist of the time, usually introduced by the name Carolus Clusius. Charles de le Ecluse managed to create the climate necessary for flowers and the tulips bloomed in the Habsburg garden. Rumors about Ecluse’s success reached the leadership of Leiden University, which invited him to become the curator of the university botanical garden.

From Austria to Holland

In the autumn of 1593, Charles de l'Ecluse arrived in the Dutch city of Leiden with a secret cargo of tulip bulbs. And already in 1594, the first tulip he planted in Holland bloomed. In Leiden, Ecluse was engaged in crossing different types of tulips, trying to develop tulips that could be grown in a harsher climate than Turkey and produce petals of different shades. For more than twenty years, Charles de le Ecluse worked at the Leiden Botanical Garden, but one day the tulips he grew were stolen. Soon the flowers were attacked by some unknown disease (it is believed that it was a virus) - the tulip buds took on unprecedented forms, the edges of some petals seemed to be cut, and new shades appeared. It was this anomaly that served as the beginning of tulip mania in Holland. Just don’t think that at that time all of Holland was blooming with tulips. These flowers were a symbol of luxury and their presence in the Dutch garden testified to the high status of the owners in society.

Incredible numbers

Why were tulips so important? The fact is that every rich man of that time had plenty of real estate and horses and carriages, but the tulip was just such a rare and exceptional thing that could always tell about the wealth of the owner. In 1623, one bulb of the most popular varieties of tulips cost 1000 guilders. Is it a lot or a little? Decide for yourself - the annual income of the average Dutchman of that time was 150 guilders, which means he had to save for almost seven years to buy one tulip. There are known facts when tulips were exchanged for real estate and land. Tulip sellers of that time earned about 6,000 guilders monthly. Some transactions are absolutely amazing, for example in 1635 40 tulip bulbs were sold for 100,000 guilders. What a gigantic amount of money this is can be understood by learning the prices for food at that time: one ton of butter for a stall was 100 guilders, 10 fattened pigs - 300 guilders. The bulbs of the “Semper Augustus” variety were considered the most expensive - there is a known deal for the sale of one bulb of this variety at a price of 6,000 guilders.

Tulip Exchanges

The demand for tulips was increasing, but the supply was not enough. Many Dutch people plunged into the tulip business. Tulip exchanges opened in Amsterdam, Rotterdam, Haarlem and Leiden. Not only “live” tulip bulbs were traded on the exchanges, but also those that had not yet grown. There, deals were also made for the future, where people agreed to buy or sell a specified number of tulip bulbs for a specified amount at a specified time in the future (in modern terms, using options). It was the use of options that was one of the reasons for the formation of the “soap bubble” and its decline. Options appear to have given many new traders the opportunity to enter a market that was previously closed to them. In such transactions, not only the ungrown “children” of already planted bulbs were sold, but also bulbs that had yet to be planted next fall. These transactions were called "wind trading" (English: " wind handel"). In a word, real exchange life was in full swing, in which speculation was not in shares, but in tulips. Many Dutch people, driven by tulip mania, sold their only possessions in order to buy a couple of tulip bulbs and later sell them at a higher price.

Tulip mania bubble

Prices for tulip bulbs increased every year. But in 1637 the market overheated - prices reached such heights that demand fell sharply. The indebted and impoverished Dutch were left with a lot of tulip bulbs - but there was no one to sell them to. That year, the price of bulbs fell 100 times. This price collapse hit the entire Dutch tulip industry. The tulip crisis became the cause of the subsequent financial crisis in Holland; it turned out that the entire economy of the country was focused on tulips. Affected citizens began to blame the government for provoking the tulip crisis, which adopted a number of amendments to the laws on tulip trade, limiting stock speculation. It is clear that the Dutch government only “closed the hole” that allowed tulip prices to skyrocket. Not everyone understood that the sooner the bubble of tulip mania burst, the easier the consequences would be.

Tulip mania- a short-term surge in rush demand for tulip bulbs in the Netherlands in 1636-1637.

Prices for tulips of rare variegated varieties reached thousands of guilders per bulb back in the 1620s, but until the mid-1630s such bulbs were resold in a narrow circle of flower growers and wealthy connoisseurs. In the summer of 1636, non-professional speculators joined the profitable tulip futures trade. During six months of frantic trading, prices for bulbs of rare varieties increased many times, and in November 1636, a speculative increase in prices for simple, affordable varieties began. In February 1637, the overheated market collapsed, and many years of litigation began between sellers and buyers of unsecured tulip contracts. A crisis of confidence arose among the participants in the tulip mania; an atmosphere of rejection of gambling and stock exchange games was established in society for a long time. Moralist contemporaries unanimously condemned tulip mania as an extreme manifestation of unfettered acquisitiveness.

Already in the 1650s, the legend about rampant tulip speculation turned into a myth that had little to do with history. Tulip mania is the first stock market bubble in the history of modern times, a full-scale economic crisis that undermined the Dutch economy for a long time. The tulip fishery continued to develop and over time became an important sector of the national economy. Various explanations for what happened coexist in science; It is impossible to reconstruct the actual causes, scope and consequences of tulip mania in a consistent manner due to the scarcity and incompleteness of genuine historical evidence. Researchers only agree that in the winter of 1636-1637 something extraordinary happened in Holland, which had no analogues in history before.

The first tulips of Holland

Tulips from the early 17th century

In the middle of the 16th century, the tulip entered Western Europe from Iran and the Ottoman Empire. In the spring of 1559, the first tulip known in Western European history bloomed in Augsburg; in 1562, merchants first brought tulip bulbs to Antwerp. Thanks to the works and authority of Charles Clusius, European monarchs became acquainted with the new product; The tulip became the favorite flower of the French and German aristocracy for a long time. By the end of the century it was grown throughout central and northern Europe. The best conditions for this culture are in the Rhine basin: in eastern France, northwestern Germany and the Netherlands; The light coastal soils of North Holland suited tulips especially well. In this “melting pot”, during the centuries-long hybridization of about fourteen natural species and an unknown number of Turkish varieties, a new, man-made type of tulip emerged - the Gesner tulip, or simply the garden tulip.

At the end of the 16th century, the center of the tulip trade was based in northeastern France; bulbs from French gardens were eagerly purchased by wealthy clients from England, the Netherlands and the German principalities. It was in France that the first boom in prices for tulips in European history took place, of which only anecdotal evidence has survived: in 1608, a miller exchanged his mill for a single bulb; grooms considered such bulbs to be an enviable dowry. The Dutch became seriously interested in tulips only at the beginning of the 17th century. Probably the reason for this was the Dutch Revolution, during which the national aristocracy was bled dry. The Golden Age of Holland had already arrived, the country was getting richer, but there were very few truly rich people capable and willing to pay for an expensive hobby. Communities of Dutch amateur flower growers and bulb speculators have not yet developed; in their place there were disparate groups of people who did not trust each other. The highest circle was formed by a few wealthy experts; gardeners and pharmacists stood much lower on the social ladder; even lower stood wandering predators - rhizotomi (from Greek: “root cutters”), combing the gardens of France in search of rare bulbs.

Haarlem in 1656 (north is on the left). To the right (south) of the city wall is a concentration of small tulip farms and the beginning of the Wagenweg highway

By the beginning of the 17th century, Dutch gardeners had mastered tulip farming techniques; in the second decade of the 17th century, growing tulips and trading in their bulbs became a full-fledged profitable business. The oldest tulip farms were located along the Wagenweg highway near Haarlem; after Haarlem, tulips began to be grown in other cities. In 1610, the Dutch began exporting rare bulbs to the southern Netherlands, the German principalities and France, where in 1610-1615 there was a fashion for decorating ladies' necklines with live tulips. German aristocrats paid generously, but unstablely - due to wars and uprisings that regularly broke out. For the same reason, thousands of refugees of all classes moved to the Netherlands every year, and among them were wealthy tulip connoisseurs. With them, precious bulbs of Flemish and French selection came into the country, serving as reliable “travelers’ checks” for immigrants. The number and variety of cultivated plants has increased; During the 1620s, the tulip went from being a rarity to being expensive, but still affordable to the middle class, popular product. Previously, amateur flower growers exchanged bulbs; in the 1620s they began to buy them. With the end of the economic depression of the 1620s and the beginning of the “Golden Twenty Years,” a stable domestic market for tulips emerged in the country.

Tulips of simple, common varieties were relatively inexpensive: two hundred bulbs sent as a gift to the Turkish Sultan in 1612 were valued at only 57 guilders. The greatest profits were brought by the newest varieties that had not yet had time to reproduce, so gardeners began hybridizing and selecting tulips, and merchants began promoting new products to wealthy clients.

Discovery of variegated varieties

Variegated tulips from the 1630s. Left – ‘Semper Augustus’

In 1580, Charles Clusius (one of the most important European botanists of the 16th century) first observed the phenomenon of viral variegation of tulips. Every year, one or two bulbs out of a hundred were “reborn”: the colors of their petals, previously ordinary two-color ones, were mixed in a bizarre pattern. Some of these plants turned out to be non-viable, others took on ugly forms.

The strongest ones produced flowers of unprecedented beauty by the standards of that time; variegated tulips, weakened by viruses, multiplied much more slowly, and therefore for a long time remained a desirable and inaccessible rarity for most.

Flower growers, trying to unravel the causes of variegation, carried out a lot of experiments, but the mechanism of transmission of variegation remained a mystery; it was only clear that its manifestation could be accelerated by planting variegated tulips next to simple ones. The main way to create new variegated forms was to plant larger and larger fields of simple tulips in the hope of an accidental “rebirth” and considerable income. Floriculture turned into a game of chance, which anyone with a piece of land and a few ordinary bulbs could start. By 1633, about 500 forms of tulips had been developed in the Netherlands. The nomenclature of variegated varieties developed quickly and erratically; With the light hand of the Kennemerland elder, the most exquisite variegated tulips began to be called “admirals”, with the addition of the name of the breeder or seller.

The most famous variegated variety, the personification of tulip mania, was the red and white ‘Semper Augustus’ (“August forever”). The first ‘Semper Augustus’ was developed in France; in 1614 the owner sold it for next to nothing to Holland. Ten years later there were already about a dozen ‘Semper Augustus’ bulbs in Holland; they all belonged to some amateur connoisseur. In 1623 he was offered twenty thousand guilders for a dozen onions, in 1624 - three thousand guilders for one; each time the owner refused. In the only reliably known transaction, an onion with two children was sold for a thousand guilders. The search for ‘Semper Augustus’ in its supposed homeland ended unsuccessfully; none of the varieties of Dutch selection was able to displace the original.

Players

Trader and tulip lover. Caricature painting from the mid-17th century

One thousand guilders, which were allegedly offered in the 1620s for one onion, was 10.28 kg of silver or 856 grams of gold. The income of a skilled artisan then did not exceed three hundred guilders a year. An average merchant earned from one to three thousand guilders a year, and only a few of the most successful entrepreneurs had an income of over ten thousand guilders. In the 21st century, the tulip is an everyday plant, and at the same time one of the symbols of the Netherlands, but the Dutch of the 16th-17th centuries treated the tulip differently. The whimsical and changeable flower from the distant East was a symbol of novelty, unpredictability, it aroused admiration and the desire to possess it. A similar attitude is recorded in both French and English sources, but only in Holland did rare tulips take the place of the highest value in the public consciousness, on a par with gold and precious stones. At the same time, the tulip, unlike the stone, could be propagated; it was not only a treasure, but also a profitable investment.

For an enlightened European, a rare tulip was akin to a work of art; he occupied a unique niche. The circle of tulip connoisseurs and the circle of art patrons overlapped in many ways; the same customers purchased from the same intermediaries paintings by great masters, antique statues and rare bulbs. Of the 21 participants in the first tulip auction, about which detailed records have been preserved (1625), only five dealt with tulips professionally, but 14 buyers were known as collectors of paintings.

By the 1630s, the circle of people able to pay for the expensive hobby had expanded noticeably, but it was not widespread: in Haarlem, the tulip capital of Europe, 285 famous people by name took part in tulip mania; in Amsterdam there are only 60, in Enkhuizen 25. All of them were wealthy people, experienced in trading matters. Among them were no nobles, no lackeys, no legendary chimney sweeps: the people on this list are the owners of successful enterprises. There were no representatives of the ruling oligarchy among them. Flower growers from the middle class, on the contrary, actively promoted their hobby and willingly bought and sold bulbs. One of them, a surgeon immortalized by Rembrandt, even adopted the surname Tulpa(Dutch tulip) and decorated the house with a “tulip” coat of arms of his own design.

Dr. Nicholas Tulp. Detail of a painting by Rembrandt from 1632

The passion for tulips usually united not just people of the same circle, but people who knew each other well - close and distant relatives, residents of the same street, parishioners of the same church. Society as a whole was fragmented into closely knit clans, workshops, and religious communities, and the consequence of this structure was an unusually high level of trust within the networks of tulip lovers. The friendly, trusting atmosphere gave false confidence in their own knowledge and skills, and at the same time subordinated their will to rumors and other people's opinions. The Dutchman might not trust competitors from another city, but the opinion of neighbors and drinking buddies was the highest authority for him.

Those who ask a rhetorical question - “how did it happen that the rational and thrifty Dutch suddenly became obsessed with tulip speculation?”- stereotypes of behavior of the Victorian era are unwittingly attributed to people of the 17th century. The Dutch of the 1630s, who fought Spain for half a century for independence and religious freedom, bore little resemblance to the bourgeoisie of the 19th century. Indeed, the Dutch of all classes were characterized by a passion for saving and accumulating wealth: even poor artisans annually put aside several dozen guilders. Wealthy depositors of the Bank of Amsterdam increased their deposits of gold and silver by 60% in five years, 1633-1638. Thrift combined with the Dutch's universal passion for gambling. Dutch society was young not only historically, but also physically: its demographic structure was dominated by young people - children and grandchildren of the founders of the state and numerous immigrants. Thousands of Dutch people went overseas every year, and the richest merchants financed colonial campaigns and risky polder drainage projects. The country was experiencing twenty years of unprecedented economic growth, but the life of each of the Dutch, as in the Middle Ages, was under threat. In 1623-1625, the Netherlands experienced a plague epidemic; in 1635 the plague returned with German troops. In that year, a third of the population died in Leiden, and in Haarlem, mortality from the plague peaked in the autumn of 1636. The coincidence of the epidemic and tulip mania in time is not accidental: the war and the plague, the feeling of imminent death, accustomed the Dutch to risk and removed the last moral prohibitions that kept them from reckless speculation.

Windhandel - air trading

"Flora's Chariot" An allegorical painting by Hendrik Pot, circa 1640, is a popular popular print subject ridiculing simpleton speculators. The carriage with the goddess of flowers and her idle companions rolls downhill into the depths of the sea. Behind her wander artisans who have abandoned the tools of their labor in pursuit of easy money.

The first signs of tulip mania appeared in 1633 in West Friesland, far from the tulip farms of Haarlem and the big money of Amsterdam. In the summer of 1633, tulip prices rose so much that one of the residents of the city of Horn exchanged his stone house for three bulbs; Following this, a local farmer exchanged his farm for the bulbs. The cost of real estate in each transaction was at least five hundred guilders. Previously, the Dutch bought bulbs for money; in 1633 the bulbs themselves became money. Perhaps the market was heated by external demand; in April 1632, a temporary lull occurred in the German lands, and German aristocrats began to again purchase luxury goods from the Dutch. Perhaps the excitement was fueled by gardener breeders, who released a particularly large number of new products onto the market in 1634. Prices for former market favorites have decreased, and with them the threshold for entry into the market for new participants has also decreased. The number of bidders grew rapidly, and within two years qualitative changes took place in the tulip business.

The most important innovation of 1634-1635 was the transition from transactions for the purchase and sale of cash goods to futures trading. In the Netherlands, tulips bloom in the spring; at the beginning of summer, the faded bulb sets forth a new generation of bulbs and dies. Young bulbs are dug up in mid-summer and planted in a new location in late autumn. The buyer can purchase young bulbs from July to October; It is impossible to dig up and replant already rooted bulbs. To circumvent the restrictions imposed by nature, in the fall of 1634, Dutch gardeners began trading in bulbs. in the ground- with the obligation to transfer the dug bulbs to the buyer next summer. The following season, in the fall of 1635, the Dutch moved from dealing in bulbs to dealing in contracts for bulbs. Speculators resold each other receipts for the delivery of the same bulbs; according to a contemporary, “traders sold bulbs that did not belong to them to buyers who had neither the money nor the desire to grow tulips”. In conditions of constant rising prices, each transaction brought considerable profit to the seller of the receipt. These profits could be realized the following summer, provided that the resold onion survived and did not degenerate, and that all participants in the chain of transactions fulfilled their obligations. Transactions were secured by notarization of a guarantee from respected citizens (Dutch borgen). The main protection against non-fulfillment of the deal was, first of all, the business ethics of the “families” and the atmosphere of intolerance to fraud.

The Dutch called such speculation windhandel, "air trade".

In December 1634, a transition was recorded from trade in whole bulbs to trade in ases - conventional units of weight of bulbs. At first, flower growers used pricing in ass to fix the benefit from the annual growth of the bulb (there is a known case when a valuable bulb increased fivefold during the season). By the fall of 1635, almost all transactions were tied to the weight of the onion, and then the conventional unit began an independent life. There were transactions “for a thousand aces” of small children, transactions with shares of an onion expressed in aces and similar derivative instruments. Sometimes tulip contracts were essentially insurance deals, sometimes a cover for ordinary bets (for example, in September 1635, two professional flower growers entered into a deal to sell a bulb for 850 guilders with a deferred payment of six months, provided that during this time the Dutch army will be able to recapture the Shekenschanz fortress from the Spaniards).

In the summer of 1636, the old system of trade through flower growers and respectable amateurs was supplemented by “popular” auctions, which attracted new participants to speculation. In Haarlem, Leiden and about a dozen other cities, “colleges” were established - clubs of local tulip lovers; their spontaneously formed organization parodied the structure of the Amsterdam Stock Exchange. The first colleges operated under the roof of parish churches; then tulip lovers firmly established themselves in taverns and taverns, in the suburbs of Haarlem and in brothels. The boards met two to three times a week. At the beginning of tulip mania, each “session” took an hour or two; in the winter of 1636-1637, the boards met almost around the clock. Rich amateurs rarely appeared on colleges; The majority of the audience was the local poor, who sought to join the supposedly profitable game in the company of experienced speculators. Rare, expensive bulbs were beyond their means - the collegiums sold mainly ordinary, inexpensive varieties. It was around them that an unfounded excitement unfolded in the winter of 1636-1637. The trades were conducted on the model of “exchange” auctions; at the end of each transaction, buyers paid the seller symbolic “wine money” (no more than three guilders), and sellers paid the buyers a “premium,” the amount of which was the subject of the auction. All actions in the colleges were accompanied by copious libations; the “madness of the crowd” was actually a consequence of the constant intoxication of tulip lovers. No one was interested in either the solvency of buyers or the ability of sellers to deliver goods: there was an open, unsecured and unregulated “trade in the air.”

Hype

Dynamics of the index of futures (green) and option (red) prices for bulbs in 1635-1637 according to Thomson

All researchers of tulip mania note the paucity of surviving archival data on bulb prices before the start of the rush of 1636-1637 and after the collapse of tulip mania. For example, of the approximately 400 prices summarized in Maurice van der Veen (2012), only 20 are from the period before November 1636, and 7 from the second half of 1637 and 1638. Incomplete data allows for different interpretations of the events immediately preceding the peak of tulip mania, but this peak itself is documented in great detail and has clear time boundaries. Tulip mania in the narrow sense began in the first week of November 1636 and ended in collapse in the first week of February 1637. During the two previous years, from 1634 to the end of October 1636, prices for bulbs grew evenly: for example, one ace of the 'Gouda' variety cost 1.35 guilders in December 1634, 2.1 guilders in the winter of 1635-1636, and in May 1636 the price rose to 3.75 guilders. According to the calculations of economist Earl Thomson, the price index almost tripled in two years - from 22 to 61.

In early November 1636, prices fell sevenfold. According to Thomson, the market reacted with a collapse to the news of the Battle of Wittstock: with the return of hostilities and peasant uprisings to Thuringia and the West German principalities, the Dutch lost a profitable market. German aristocrats urgently sold their not yet rooted bulbs, and the supply of rare tulips in Holland suddenly increased. The new, low price level for real bulbs recorded fundamental changes in the market; the subsequent rapid rise in prices for unsecured tulip contracts was the product of a purely speculative game. Novice speculators who resold contracts to each other expected to profit from rising prices; flower growers and wealthy hobbyists who owned real bulbs and knew their real price hoped to make money, if not from selling the bulbs, then from compensation from unlucky buyers. According to Thomson, chains of futures contracts became unrelated options. The compensation rate for such options was not established by law, and buyers of tulip options believed that they were not risking anything. Nothing could stop the rise in contract prices.

In mid-November, prices soared again. By November 25, they exceeded the October maximum and doubled in December. By Christmas the price index was almost 18 times the November low and continued to rise throughout January 1637. It happened that the same onion was resold ten times during a “trading session,” and each transaction brought the seller a considerable paper profit. In Holland alone, according to Mike Dash, at least three thousand people took part in the auction, and in all the United Provinces - at least five thousand; local colleges of speculators appeared in Utrecht, Groningen and in the cities of northern France. Rare varieties and their paragon imitations became so expensive that they were out of reach for most tulip lovers - then the colleges focused on trading in “junk” varieties. A pound of an inexpensive, common variety Switser, which cost 60 guilders in the fall, and 125 guilders in December, by the beginning of February had risen in price to 1,500 guilders. A strange and intolerable situation had developed on the market: transactions with real bulbs growing in the ground were carried out at the low prices established in early November, and in the colleges speculators resold unsecured contracts to each other at twenty times the price. In a society frightened by the plague epidemic, there was confidence that the bubble was about to burst; the number of optimistic buyers has declined. Haarlem tulip lovers were the first to sound the alarm: on Tuesday, February 3, another auction for the sale of “garbage” bulbs failed at the Haarlem College. Only one of the bidders agreed to purchase, at prices 15-35% lower than the prices of previous auctions. Speculators were confused, and the next day, February 4, trade in Haarlem stopped completely. It took several days for the terrible news to spread throughout the country, so trading continued on February 4 in The Hague, on February 5 in Alkmaar, and on February 6 in Amsterdam.

The culmination of tulip mania was an auction held on February 5 in Alkmaar, just twenty miles from Haarlem. A collection of bulbs collected by Wouter Winkel, a local innkeeper, amateur florist and extremely successful speculator, who died in the spring of 1636, was put up for auction. In July 1636, the seven children of the deceased, placed in an orphanage, managed to secretly dig up the precious bulbs. In December, these bulbs, carefully weighed and described under the supervision of a board of guardians, were planted in the ground and awaited new owners; Unlike purely speculative transactions with option receipts, live, cash goods were sold at the Alkmar auction. The widely publicized auction attracted dozens of the most experienced and wealthy connoisseurs; without waiting for the auction to open, one of them bought 21 thousand guilders worth of tulips from the orphans, including the only “Admiral Enkhusen” bulb for 5,200 guilders. At the auction itself, prices reached 4,200 guilders per bulb, and in total the orphans received more than 90 thousand guilders, which in the 2010s is equivalent to approximately 6 million pounds sterling. The results of the auction, immediately published in a printed pamphlet, stunned experts; What became a sensation was not the absolute amount, but the price increase recorded at the auction. The rarest “Admiral Lifkens”, which in the summer cost 6 guilders per ac, went under the hammer at a price of more than 17 guilders, prices for less valuable varieties tripled over the same period. Two days after the Alkmaar auction, the markets of all cities in Holland collapsed completely and irrevocably; The orphans never saw their money.

Pay

"Allegory of Tulip Mania." Painting by Bruegel the Younger on a popular print, circa 1640

A twenty-fold drop in prices in February 1637 brought buyers of tulip contracts to the brink of ruin. They did not want to pay the sellers, and often could not, but refusal to fulfill obligations in the then Netherlands with their “families”, communities and workshops was impossible. Failure to fulfill an obligation bordered on a crime; bankruptcy forever made the Dutchman an outcast. At first, buyers and sellers tried, privately, to come to an agreement and terminate the enslaving contracts with the payment of compensation - but only a few managed to disperse peacefully. The most active, well-organized party in February were professional flower growers: already on February 7, deputies from the provinces of Holland and Utrecht agreed to hold a congress. Two weeks later, the Farmers' Congress decided to seek a legal minimum compensation of 10% for transactions concluded after November 30, 1636. Earlier deals, flower growers insisted, should have remained in place. Most flower growers signed forward contracts for the sale of bulbs back in October-November; The fate of the numerous intermediaries who resold the bulbs to each other did not interest them.

The city magistrates were in no hurry to make a decision. The officials involved in the speculation hoped to resolve the conflict to their own benefit, but the conflict turned out to be too complex and large-scale. In Haarlem, where passions were particularly raging, the city council in March ruled in favor of the buyers of contracts, in April in favor of the sellers, and then canceled all the regulations and asked for help from the States General. The uncertainty aggravated the panic among tulip lovers and played into the hands of their many opponents. Pamphlets, proclamations and cartoons denouncing the “mad” speculators were printed and distributed throughout the country. The search for those responsible for the disaster began; Calvinist agitators openly pointed out the conspiracy of Jews, Mennonites and bankrupts (in the Netherlands the latter lived as untouchables). The prudent Doctor Tulp permanently removed the coat of arms depicting three tulips from the façade of the house. The matter did not come to witch hunts and pogroms: parliamentarians, acting on the recommendations of the supreme judges, made a decision on April 27, 1637. All tulip contracts, regardless of the date of signing, were temporarily suspended; the supreme power washed its hands of the matter, entrusting the final decision to the city magistrates. The regents of Amsterdam decided that the contracts remained in force, and flower growers and tulip lovers retained the right to trial; Haarlem, Alkmaar and all other cities in the Netherlands declared the tulip contracts void.

"Flora's Jester's Cap." A popular popular print story, thanks to which tulip lovers got the nickname “cap-makers”

The simple solution, which forced creditors and debtors to deal with each other privately, deepened the crisis of confidence and forever destroyed the trusting atmosphere of Dutch communities: creditors harassed debtors, and debtors refused to pay and no longer considered such a refusal to be an emergency. The intolerance of the “zero option” was first realized in Haarlem: in January 1638, the first Floral Arbitration Court in the Netherlands (Dutch abbreviated as CBS) opened here. The main task of the four CBS mediators was not to establish the truth, but to reconcile the townspeople by forcing them to negotiate. In May 1638, a standard recipe for resolving the dispute was developed in Haarlem: if the seller insisted on returning the debt, the debtor-buyer was released from any obligations after paying the seller 3.5% of the contract price. These conditions were not beneficial to either flower growers or debtor tulip lovers; it was easier for the disputants to disperse peacefully than to seek a formal verdict from CBS. Acting according to this scheme, Haarlem mediators resolved all conflicts in their city by January 1639. Tulip mania is officially over, at least in Haarlem; in The Hague and Amsterdam, creditors pursued tulip debtors in the 1640s. Economist Alexander Del Mar believed that the end of tulip mania came in 1648, with the conclusion of the Peace of Westphalia. Under the terms of the treaty, the Netherlands stopped freely minting coins, the flow of silver into the country decreased, and only then did the Dutch have to tighten their belts and give up expensive hobbies.

In popular and economic literature, the opinion has been established that most tulip lovers went bankrupt, and “The commerce of the country was in a state of deep shock, from which it only recovered many years later.”. In the 21st century, this opinion is supported by the influential economist Burton Malkiel: “this crazy story ended with the shock of the rise and fall of tulip prices leading Holland into a long depression that spared no one.” In reality, no economic crisis, “shock” or even mild recession occurred; The “golden twenty years” continued. The tulip industry involved negligible resources of society, so even the complete death of Dutch floriculture and the ruin of all tulip lovers would not have undermined economic growth. This did not happen; no evidence of destruction due to tulips was preserved in the archives. In Amsterdam, the number of personal bankruptcies in 1637 doubled compared to 1635, but out of hundreds of bankrupts known by name, only two or three people speculated in tulips. On the contrary, it is known from land records that dozens of prominent tulip lovers bought real estate in 1637-1638 and clearly did not experience cash flow problems. The most famous “bankrupt of tulip mania” is the artist Jan van Goyen, who had the misfortune of buying a tulip contract on February 4, 1637 - but in fact, van Goyen went broke not on tulips, but on land speculation.

Jan van Goyen- portrait by Gerard Terborch

Long-term consequences

The market for rare tulips recovered from the disaster within two years; already in the summer of 1637, real transaction prices approached one thousand guilders per onion. It is likely that prices then continued their gradual decline. Scarce data from the early 1640s indicate that by this time prices for rare tulips were about six times lower than prices in 1636-1637 and amounted to one or two hundred guilders per bulb. Following the decline in prices and profits, the number of tulip farms gradually decreased. By the middle of the 17th century, the entire Dutch tulip industry was concentrated within the city limits of Haarlem; about a dozen surviving farms shared the national market and controlled the export of tulips until the start of the Napoleonic wars. Dutch floriculture of the 18th century served as a model for the French and English; An internship in Holland was considered the key to success in floriculture. The memory of the excitement of 1636-1637 became the best advertisement for Haarlem flower growers and helped them maintain leadership in the cultivation and selection of tulips - as it turned out, forever. In the 19th century, city farms could no longer cope with the growing demand, and the people of Haarlem planted the first tulip fields on the drained polders of Haarlemmermeer, which soon became one of the symbols of Holland. When these lands were fully occupied, Haarlem firms established plantations in Hillegom and Lisse, and in the 20th century, tulip production spread throughout North Holland. In the 21st century, the Netherlands produces more than four billion tulip bulbs annually and controls 92% of the world's tulip trade.

The “heroes” of tulip mania, rare variegated varieties, became extinct a long time ago. Of all the variegated varieties listed in 1637, only ‘Zommerschoon’ has survived to this day. The legendary 'Semper Augustus' went out of fashion not only in Holland, but even in England by 1665. A hundred years after tulip mania, ten bulbs of ‘Semper Augustus’ were given one guilder; in the middle of the 18th century, mentions of the variety ceased forever. The old favorites were replaced by new variegated varieties that cost up to four hundred guilders per bulb, and then they too went out of fashion, fell in price, and fell victim to the virus. After World War II, variegated tulips, breeding grounds for the disease, were banished from commercial farming; by 2013, not a single Rembrandt remained in the Royal Association's variety register. The variegation of varieties cultivated in the 21st century is not due to a virus, but to artificially caused mutations.

Flower booms

Flower manias flared up from time to time in the 18th and even 20th centuries. In 1703, with the coming to power of Ahmed III, the “age of tulips” began in the Ottoman Empire. The new Sultan, himself a connoisseur and lover of tulips, awakened a new wave of tulip mania in Istanbul society. Taking into account the experience of Holland, Ahmed did not allow open speculation: first, he limited the number of flower growers who had the right to trade in bulbs in Istanbul, then he limited the prices of bulbs and banned the trade in tulips in the provinces. After the deposition of Ahmed in 1730, the hobby quickly faded away; many varieties of selection from the beginning of the 18th century perished in neglect. Around the same years, the “mania” returned to the Netherlands: hyacinth fever began here. The Dutch, previously indifferent to double hyacinths, suddenly became fascinated by them. In the 1720s, prices for new varieties of hyacinths rose steadily but slowly. In the 1730s, a rush of demand began, which flower growers could not satisfy (hyacinth grows and reproduces much more slowly than the tulip). Exactly one hundred years after the tulip mania, in 1736-1737, hyacinth prices peaked at a thousand guilders per bulb and then collapsed. By 1739, prices for rare hyacinths fell 10-20 times. No futures or options were used this time, and the total number of hyacinth speculators was small, so the market crash in 1737 passed without consequences, and the fever of 1736-1737 itself was quickly forgotten.

Another century later, in 1838, dahlia fever began in France; At the peak of the hype, a “bed” (a conventional unit of small-scale wholesale trade) of dahlia tubers cost up to seventy thousand francs. In 1912, a short-lived excitement around the newest varieties of gladioli began in the Netherlands, which was interrupted by the outbreak of the First World War. The most recent flower “mania” occurred in the 1980s in China around Lycoris radiata, or spider lily, a common ornamental plant that was widely cultivated in Manchuria both during the empire and under the communists. By 1982, bulbs of rare, newer varieties cost up to one hundred yuan (about 20 US dollars); in 1985, prices peaked at 200 thousand yuan per bulb, which was approximately three hundred annual salaries for a skilled Chinese worker. In the summer of 1985, the black market for bulbs collapsed, prices fell by about a hundred times.

The Legend of Tulip Mania

Title page of “The First Conversation between Warmondt and Gargudt.” 1734 edition, published at the height of the hyacinth fever

In 1637, a Haarlem publisher published the pamphlet “Conversation between Warmondt and Hargudt”; in the same year, 1637, the first “Conversation” was followed by the second and third. "Conversations" - the only thing historical evidence detailing the structure of the boards, the “technology” of speculation and the development of events after the February crash. It is to them that all studies of tulip mania go back, from the chronicles of the 17th century to the works of the 21st century. Quite a lot of documents from the 17th century about the cultivation and trade of tulips have been preserved, but almost all of them are either not directly related to tulip mania or do not confirm it in any way. Only about fifty handwritten, hand-illustrated albums and catalogs of tulips have survived, but the prices are indicated in only a few of them; it is not known how real or inflated they are. The same uncertainty accompanies other documents that record prices for rare bulbs - bills of sale, auction reports, court and inheritance cases. According to historians of the 21st century, the Conversations present facts reliably and accurately, but are certainly biased. This is not a guide to trading, but an open sermon. against games. The uncritical attitude of later authors to the polemical spirit of the Roman contributed to the fact that the factually incorrect legend about tulip mania took hold in literature and folk tradition.

By the middle of the 17th century, the legend about the collapse of 1637 had become a myth and was overgrown with fables. In the 1660s, Aitsema reproduced a critical account of the Roman in his six-volume chronicle; in the 1670s, his own critical description of tulip mania was published by Abraham Munting, the son of a Dutchman who lost his fortune in tulip speculation. In 1797, the story of Johann Beckmann was published and then repeatedly republished - a compilation of “Conversations” and numerous historical anecdotes of the 17th-18th centuries. It was Beckman who “introduced” the story of a sailor who ate a precious onion, mistaking it for an ordinary onion; he also wrote the words: “Finally, the onion burst like a soap bubble.” Beckmann's argument that no person in his right mind would ever agree to pay hundreds and thousands of gold pieces for “useless rhizomes” long defined the perception of tulip mania as an irrational mass madness that ended in a ruinous crisis. In 1841, Beckman's interpretation of events was finally consolidated by Charles Mackay's The Most Common Delusions and Follies of Crowds.

During the Great Depression, McKay's book became popular in the United States thanks to the work of Bernard Baruch. In the preface to the 1932 reissue, Baruch wrote that it was Macke's description of tulip mania that helped him save his fortune: he managed to get out of the stock market before the crash of 1929. In the 1930s, the Mackean myth became firmly established among politicians and journalists; Since then, in the English-speaking world, not a single economic shock, large or small, is complete without mention of tulip mania. "Detailed descriptions" of tulip mania in popular literature have taken on an exaggerated, implausible appearance: for example, in 1997, Management Today columnist Rymer Rigby seriously argued that “By 1630, the once bustling, busy, world-famous Dutch economy was completely dependent on tulips... every free square inch of land was devoted to their cultivation...”.

In serious economic works of the first half of the 20th century, the Mackean myth was almost not used. The situation changed in 1957, when Paul Samuelson introduced into the lexicon of economists the concept of “tulip mania phenomenon” - a market condition in which prices and costs of sellers can rise indefinitely, and can collapse at any unknown point in time. In the 1960s, tulip mania became permanently entrenched in the language of academic economics as a full-fledged economic term. In the first edition of the Palgrave New Economic Dictionary (1987), one of the authors of the sunspot theory, Guillermo Calvo, defined tulip mania as “a [market] condition in which the behavior of the prices of certain goods cannot be fully explained by fundamental economic factors” (in 21st century economics this formula - one of the definitions of a financial bubble). However, this approach was by no means universal: in the same 1987, Charles Kindleberger in his “Financial History of Western Europe” believed that any speculative crisis is necessarily preceded by an abnormal expansion of the money supply, and in the 17th century, in the absence of a banking system, it was impossible . Kindleberger's critic, libertarian Douglas French, believes that the money supply of the Netherlands expanded rapidly even without bank credit, due to income in gold and silver from colonial trade and piracy, i.e. Tulip mania was a by-product of the economic policies of the United Provinces, which encouraged the flow of wealth into the country.

Latest research

The revision of the McKean myth began in 1989 with the publication of an article by Peter Garber in the Chicago Journal of Political Economy. Having examined the sources available to Beckman and Mackay, he came to the conclusion that the canonical description of tulip mania is nothing more than a legend generated by the propaganda of the 17th century. The driving force behind this legend was the desire of the Dutch business elite to block the flow of investment into the shadow and speculative sectors of the economy. Emotional statements about sky-high prices for “useless rhizomes,” Garber believed, could not replace the scientific fundamental analysis of markets in the 17th century, and such analysis was neglected by his predecessors. Summarizing archival information on tulip prices, Garber argued that the surge in prices for rare varieties in the 1630s was not an irrational anomaly. The only abnormal thing was the drunken stupor of unprofessional speculators in “junk goods” in the colleges. On the market for rare tulips, prices reflected the expectations of competent sellers and buyers, and followed the usual model of the life cycle of a new product. Tulip mania, according to Garber, was neither a “mania,” nor a “bubble,” nor a “crisis”; it had no influence on the development of the country and could not do so.

In 2006, an alternative explanation for tulip mania was put forward by Californian economist Earl Thomson (1938-2010). He believed that the main reason for the rise in prices was an implicit change in the rules of the game in the market - the transition from ordinary forward transactions to risk-free options. Thomson's main conclusion was consistent with Garber's: tulip mania is "a remarkable example of efficient market pricing, in which option prices roughly matched the expectations of knowledgeable sellers." Thomson's work has also come under severe criticism from various quarters.

In historical scholarship, the revision of the Mackean legend was consolidated by Anne Goldgar’s “Tulipomania,” published in 2007, a convincing work based on a mass of new archival materials. Goldgar not only set out the sequence of events, cleared of later distortions, but also tried to clarify the place of floriculture in the life of the Dutch in the 17th century, and the reasons why such a phenomenon left such a long and incorrect memory of itself. The main motive and conclusion of the book is that tulip mania was an acute shock to the ethical foundations of society, unexpected for contemporaries. Its collapse did not cause direct damage to the country's economy, but it forever changed the business climate of Holland. Tulip mania is still mentioned both as a symbol of the economic crisis and as an example of “the delusions and follies of the crowd,” including by top-ranking financiers. For example, former Dutch finance minister and central bank governor Noot Wellink, denouncing cryptocurrencies in 2013, said that “bitcoins are worse than tulip mania. Then, at least you got tulips for your money...”

Bitcoin to USD price chart from the website:

Financial pyramids, from which many Russians suffered at the end of the last century and the beginning of this century, turn out to be far from a new phenomenon. One of the first such pyramids arose back in the 16th century and led to the ruin of an entire country - Holland.

In 1593, Carolus Clusius, director of the herbal garden of Emperor Maximilian II, planted several tulip bulbs in the soil of the botanical garden of Leiden University. The next year, flowers appeared that determined the entire future fate of Holland.

Like most other ornamental plants, the tulip came to Europe from the Middle East. But the tulip had one interesting feature. Beautiful flowers of one color or another grew from its bulbs, and after a few years it suddenly changed: stripes appeared on the petals, each time in different shades. It is now known that this is the result of a viral disease of tulips. But then it looked like a miracle. If a diamond dealer had to buy a new diamond for a lot of money and cut it in a new way, then the owner of a single tulip bulb could become the owner of a new, unique variety, which was already worth several orders of magnitude more on the tulip market.

In 1612, the Florilegium catalog with drawings of 100 varieties of tulips was published in Amsterdam. For example, the bulb of the tulip shown in the picture cost, depending on the size, from 3,000 to 4,200 florins.
Many European royal courts became interested in the new symbol of prosperity. Tulips have jumped in price. In 1623, a bulb of the rare variety Semper Augustus, which was in great demand, cost a thousand florins, and at the height of the tulip boom in 1634-1636 they paid up to 4,600 florins. For comparison: a pig cost 30 florins, and a cow cost 100 florins.
The second reason for the tulip boom was the cholera epidemic of 1633-1635. Due to the high mortality rate in the Netherlands, there was a shortage of workers, so wages increased. Ordinary Dutch people had extra money, and, looking at the tulip madness of the rich, they began to invest in their own tulip business.

Clusius literally infected the Dutch with his passion for tulips. Insanity began in the country, complete madness, later called “Tulipomania” by historians. For more than 20 years, the Dutch have managed to grow dozens of varieties of tulips.
In 1625, a rare tulip bulb could already cost 2,000 gold florins. Their trading was organized on the stock exchanges of Amsterdam, Rotterdam, Haarlem and Leiden. The volume of the tulip exchange reached an astronomical amount of 40 million florins.
By 1635, the price had risen to 5,500 gold per bulb, and by early 1637, tulip prices had increased 25-fold. One onion was given as a bride's dowry, three were worth as much as a good house, and just one Tulip brasserie onion was given for a thriving brewery. Bulb sellers earned huge amounts of money. All conversations and transactions revolved around a single item - bulbs.

For example, a red tulip bulb with white veins cost 10,000 florins, and Rembrandt was paid 1,800 for his painting “The Night Watch,” which made him very happy.
The documented record was a deal of 100,000 florins for 40 tulip bulbs. To attract poor people, sellers began to take small advances in cash, and the buyer’s property was used as collateral for the rest of the amount. For example, the cost of a Viceroy tulip bulb was "2 loads (2.25 cubic meters) of wheat, 4 loads of rye, 4 fat cows, 8 fat pigs, 12 fat sheep, 2 skins of wine, 4 barrels of beer, 2 barrels of butter, 1000 pounds of cheese, a bed, a wardrobe with clothes and a silver cup" - a total of 2,500 florins. The artist Jan van Goyen paid the Hague burgomaster an advance of 1,900 florins for ten bulbs, offered a painting by Solomon van Ruisdael as collateral for the rest of the amount, and also undertook to paint his own.

Tulip fever gave rise to legends. One of them is about how a port tramp, seeing a ship entering the harbor, rushed to the office of its owner. The merchant, delighted by the news of the return of the long-awaited ship, selected the fattest herring from the barrel and rewarded the ragamuffin with it. And he, seeing an onion on the counter that looked like a peeled onion, decided that herring was good, but herring with onions was even better, put the onion in his pocket and departed in an unknown direction. A few minutes later, the merchant grabbed a tulip bulb Semper Augustus (“Eternal August”), for which he paid 3,000 florins. When the tramp was found, he was already finishing his herring and onions. The poor guy went to prison for theft of private property on an especially large scale.
Another apocryphal story is about how Haarlem tulip traders heard about a Hague shoemaker who managed to breed a black tulip. A delegation from Haarlem visited the shoemaker and bought all the black tulip bulbs from him for 1,500 florins. After which, right in front of the amateur tulip grower, the people of Haarlem rushed to furiously trample the bulbs and only calmed down after turning them into mush. They were afraid that an unprecedented black tulip would undermine their well-established business. But the shoemaker could not bear the barbarity, he fell ill and died.

Many Dutch people quit their jobs and constantly played on the tulip market. Homes and businesses were mortgaged to buy bulbs and resell them at a higher price. Sales and resales were made many times, while the bulbs were not even removed from the ground. Fortunes doubled in moments, the poor became rich, the rich became super-rich. The first financial pyramid began to be built, which even Mavrodi would envy. The tulip mafia has appeared, stealing the bulbs.

And on Tuesday, February 3, 1637, it ended in Holland. Moreover, unexpectedly and for hitherto unclear reasons. The auction began with the sale of inexpensive White Crown bulbs at a price of 1,250 florins per lot. Just yesterday there were many people who wanted to buy this lot for a much higher price, but today there were no buyers at all.
The sellers realized that all the bulbs needed to be sold immediately, but there was no one to do it. The terrible news spread throughout the city, and after some time throughout the country. Prices not only dropped - the tulip exchange immediately ceased to exist. Prices for bulbs fell on average a hundred times. Tens of thousands of people went broke and became destitute in a matter of hours. A wave of suicides swept across the country.

Many farms were sold under the hammer. Many poor people became even poorer. And Holland suffered for a long time from the consequences of speculative fever. Businessmen from London and Paris, where she managed to transfer, also suffered. Tulips from “securities” again turned into just flowers, an object of delight for the eyes of passers-by and guests.