Tulipmania

Some of us are avid gardeners, and during this late summer season, catalogs filled with Holland's finest offerings are filling our mail boxes. But do you know the strange and twisted tale of floral devotion that brought down the finances of one of the World's great seafaring nations and some of the shrewdest traders ever born?

The year was 1625 and the Dutch nation was among the greatest colonizers ever known. This tiny, low-lying land reclaimed from the sea had bankrolled Henry Hudson's famous voyage just a few years earlier and in that banner year of 1625 founded the City of New Amsterdam, New York to you, on the rude shores of an untamed land.

But while the Dutch were busy founding the great city and the first multinational corporations: the Dutch East Indies, and Dutch West Indies Companies, trouble was brewing. Then as now, much money enabled much foolishness. In this case, the chosen receptacle for idle cash was the newly-introduced tulip.

Tulips are not native to Holland, but rather to Turkey, and when the exotic bulbs were brought back, it was love at first sight. Especially prized were so-called broken bulbs with streaked, exotic colors. Today we know that such bulbs result from infections with a viral disease, but in those days, the sicker the bulb, the richer the reward.

Out of this time period comes stories of the ignorant sea captain who mistook a prized bulb for an onion and ate it by mistake while at supper with a formerly grateful employer. His next port of call? The nearest poky, as rare bulbs such as the one he consumed were worth a great deal more than his earnings for a year.

Throughout the next several years there would be stories of farmhouses changing hands for the price of 3 bulbs. A futures exchange was invented also, so that people could sell the bulbs before they even held them in their hands. The whole thing eventually came to a very bad end as all bubbles do when the supply of credulous idiots ran out.

Of course, we moderns scoff at this story as gold screams past $1,000/ounce and pigeons tip their toes in the uncharted waters of exchange-traded funds specializing in futures of wheat or pork bellies instead of brightly-colored flowers. The real estate boom is over, and we are soberly assessing the damage there too.

We would never be so insane as to value a perishable flower so highly. But, out of the wreckage of this terrible catastrophe, the Dutch salvaged a trade that still fills pockets today as leading providers of tulips and a host of other rarities salvaged from the lands that they once ruled as colonizers and merchants. What will remain of our tulipmanias?

Sources:
http://www.businessweek.com/2000/00_17/b3678084.htm
http://www.ianchadwick.com/hudson/hudson_00.htm