Katie Schickling
Professor John Levan
COM 101
13 October 2014
Tulip Mania
Tulips are highly associated with Holland however the tulip is not native there. In 1593 a botanist by the name of Carolus Clusius brought the tulip from Constantinople and introduced it to Holland (Urban, Richard). Intended to research the tulip for medical purposes, he planted a small garden robust with the flower. Clusius’ neighbors broke into his garden and stole some of the tulip bulbs to try and earn some quick money, had they not done this, tulips may have still been rare in Holland and many other places (Urban). Upon stealing the tulips and selling them, Clusius’ neighbors single handedly started the Dutch bulb trade (Urban).
Tulips then became a “hot” commodity among the wealthiest people of Holland as the prices began to rise (Wood, Cynthia). Rare tulip blub prices skyrocketed and even ordinary bulbs were out of reach for the middle class when it came to prices. “A single Viceroy tulip bulb would sell for 2500 florins a value roughly equivalent to $1,250 in current American dollars, while a rarer Semper Augustus bulb could easily go for twice that (Wood).” This shows the value of a tulip in Holland at the time and how much people were willing to give up for one bulb. Besides money, people would trade goods. For a single bulb, a person once traded “…a bed, a complete suit of clothes, a thousand pounds of cheese, two lasts of wheat, four lasts of rye, four fat oxygen, eight fat swine, twelve fat sheep, two hogsheads of wine, four tons of beer and two tons of butter. (Wood)(Colombo, Jesse).” At the peak of “tulip mania” the bulbs were deemed to be “…too valuable to risk planting by their (formerly) wealthy purchasers…. (Wood, Cynthia).” This made it popular for people to display the ungrown bulbs through windows, in gardens, as decorations, or in any other creative way they could think of. The plan to keep the tulips safe was not always successful. There was an instance where a visiting sailor ended up eating a tulip bulb for breakfast after mistaking it for an onion (Wood).
The peak of the tulip mania bubble happened in the winter of 1636-37 (Colomo, Jesse). Tulip traders started seeing dramatic fluctuation in the making and losing of fortunes. A very well established tulip trader could earn 60000 florins in just one month (Wood, Cynthia). This is the equivalent of about $61,710 in United States dollars (Wood). Local governments could not stop trades because such profits could be made. However, the tulip craze came to a stop one day when, in Haarlem, a buyer ordered tulips but failed to show up and ever get and pay for them (Colombo, Jesse).
After that happened, panic overcame Holland when in just days the worth of tulip bulbs dropped to only a hundredth of what they were formerly priced (Colombo). The rich lost their power when they traded everything for these bulbs, which were now worthless. They spent thousands of dollars and gave away so many goods to acquire these tulip bulbs, and they lost all worth, leaving the formerly wealthy people with not much to show for it. The quick demolition of the worth of these bulbs started an enormous market crash in Holland. (Colombo) The United States saw its fair share of unusual financial bubbles including: the housing bubble, the stock market bubble and the dot-com bubble (Sufi Amir, and Atif Mian). Each of these economic bubbles included price inflation in which people pay exorbitant amounts of money for things that ended up not being worth it. The prices of the items purchased should not have been priced as high as they were and after each bubble burst, people were wondering why they purchased such commodities (Sufi, Mian). In 2000-2002, the dot-com bubble burst. This destroyed $6.2 trillion in household wealth lasting over the 2 years (Sufi, Mian). Five years after the dot-com bubble, in 2007, the housing market crashed. The housing crash lasted until 2009, where “…the value of real estate