Bankrupt trading institutions, destitute investors and a collapsing economic bubble, it all sounds a bit familiar doesn’t it? Tomas Mowlam investigates a 17th Century boom and bust.
One of the most famous examples of bust following economic boom is the tulipmania which swept the Netherlands in the early 17th Century.
In 1593 the first tulip bulb was introduced into Holland from Turkey. The country was a European naval power, the profitable new lands of the Dutch East Indies brought vast wealth, and many merchants planted the flowers as status symbols.
The mosaic virus which naturally affects tulips produced the most spectacular colour variations and mixes such as the red/pink and white Rosen or the purple/lilac Violetten, which became incredibly popular.
Tulips take seven years to grow to maturity from seed so pretty soon the Dutch traders were issuing futures contracts on bulbs to be delivered.
The mania lasted from November 1636 to early May 1637 and reached its peak in February.
There’s a great many tall tales about the peaks of madness: an auction to support orphans whose only assets were 70 fine tulips, apparently netted 53,000 guilders; men were imprisoned for accidentally eating the bulbs and whole farms apparently sold for a single bulb.
The trade centred on plague-struck Haarlem, and after debtors defaulted the market collapsed in a matter of weeks. Dutch politicians trying to change the tulip contracts and the effects of the 30 years war in neighbouring Germany all contributed to it.
Historians have been arguing like angry tulip traders about how bad the bubble actually was, with some saying it was localised and wasn’t as devastating to the economy, as the current recession.
The lack of accurate economic data means that ever since Scottish journalist Charles Mackay first wrote about it in the 19th Century, tulipmania will remain a flowering argument.
The really beautiful legacy of the mania is the Dutch tulip gardens for which the Netherlands is rightly famous. During the spring wander through the breathtaking Keukenhof Tulip Gardens in Lisse and get lost in a world of colour.
Image Credit Kıvanç Niş