The story of the Dutch tulip frenzy should serve as a warning because it is the first instance of an economic bubble. Alastair Sooke takes a look back as a new exhibition of flower paintings debuts in London.
The Flemish artist Jan Brueghel the Elder started a modest but stunning still life featuring a bunch of cut flowers in a glass vase not long after the turn of the 17th century. The image, which was painted in oils on copper and enhanced the brilliance and intensity of the colors, showed a stunningly beautiful floral arrangement.
It features an exuberant display of color as chrysanthemums, narcissus, and other flowers burst from an astonishingly small jar. Two spherical flowers at the composition’s top, each appearing to be as soft and plump as a piece of overripe fruit, attract the eye. One is a delicate shade of pink, while the other is a striking, streaky mix of red and yellow. They are both tulips.
The most well-known Dutch flower painter of the early 17th century was Jan Breughel the Elder (Credit: Jan Breughel)
The opening piece of Dutch Flowers, a brand-new one-room exhibition at the National Gallery in London, is Brueghel’s still life, which is on loan from a private collector in Hong Kong. This modest, no-cost exhibition traces the development of the Brueghelian genre of Dutch flower paintings over a period of two centuries. And tulips are a recurring theme in several of the 22 gorgeous paintings in the exhibition.
“So what?” you may be thinking. After all, many other kinds of flowers, such as irises and roses, were frequently portrayed by Dutch artists. Tulips, in particular, were infamous in the 17th-century Dutch Republic. Because this was the era of the so-called “tulip frenzy,” when investors exchanged the flower’s bulbs for astronomical sums of money before the market for them abruptly and dramatically crashed. Since then, tulip mania has served as a cautionary tale and the benchmark for economic bubbles.
Around 1640, Jan Breughel the Younger made fun of speculators by portraying them as mindless monkeys in Satire on the Tulip Mania. (Photo credit: Jan Breughel Jr.)
This bubble wasn’t about to burst when Brueghel was working on his still life between 1608 and 1610, though. In order to satisfy the growing and popular interest in horticulture that was occupying gentleman botanists and affluent connoisseurs, Brueghel and his professional contemporaries, such as Ambrosius Bosschaert the Elder, painted flowers. The pioneering botanist Carolus Clusius, who founded a significant botanical garden at the University of Leiden in the 1590s, was one of its leaders.
At Leiden, Clusius also had a private garden where he planted his personal stock of tulip bulbs. Tulips were then a rare and exotic arrival to Western Europe, hailing from the Pamir and Tien Shan mountain ranges in central Asia, and had already been grown by devoted gardeners in the Ottoman Empire for decades. They were difficult to get and immediately attracted the attention of academics other than Clusius.
In his later years, Clusius spent a significant amount of time researching tulips. He was particularly curious to know how and why a specific bulb may abruptly “crack” from one year to the next. This implied that it will suddenly go from producing blooms of a single color to flowers with lovely feathery or flame-like designs involving many colors.
It was discovered much later, in the 19th century, that this striated appearance was actually the product of a virus. However, as this was still not recognized in the 17th century, strangely enough, diseased tulips with distinctive patterns began to be valued higher than healthy ones in the Dutch Republic. Botanists in the Netherlands strove to create “cultivars,” or hybrid variations, that were ever more beautiful.
These cultivars started to be traded in the early 17th century among an expanding network of gentleman scholars who traded cuttings, seeds, and bulbs both domestically and abroad.
The curator of Dutch Flowers at the National Gallery, Betsy Wieseman, adds that as the network evolved, “it became less of a friendship network, and the researchers started getting requests from people they didn’t know. So they began exchanging goods for cash. And as that network expanded, it grew more and more brittle.
The growing popularity of tulips occurred during a particularly lucrative time in the history of the United Provinces, which by the 17th century controlled international trade and was the richest nation in Europe. Because of this, not just aristocratic inhabitants but even wealthy businessmen, middle-class craftspeople, and even craftsmen found themselves with extra money to spend on pleasures like pricey flowers.
An unidentified 17th-century watercolor depicts the Semper Augustus, the most coveted and expensive type during the Dutch tulip frenzy. Wikipedia (Credit)
Already in 1623, one tulip enthusiast was persuaded to part with only 10 bulbs of the stunning and highly rare Semper Augustus, the most prized tulip variety, for the sum of 12,000 guilders, which is substantially more than the price of a posh mansion in Amsterdam. It wasn’t sufficient to close the deal.
More and more speculators entered the market in the 1630s after word spread that tulip bulbs were being sold for ever-rising prices. In Tulipomania: The Story of the World’s Most Coveted Flower and the Extraordinary Passions It Aroused, historian Mike Dash eloquently describes the complexities of this industry as well as its weaknesses (1999).
One of the oddities of the 17th-century tulip market was that people traded bulbs of rare and desired types rather than the actual flowers. Dash notes that the outcome was “what would today be referred to as a futures market. In 1633, real estate was exchanged for large quantities of tulip bulbs, marking the first time tulips were used as money in and of themselves.
The goddess of flowers in Hendrik Gerritsz Pot’s Flora’s Wagon of Fools directs the Haarlem weavers into the stormy waters that will drown them. (Photo courtesy of Hendrik Gerritsz Pot)
People chose to participate when they heard tales of acquaintances making unheard-of gains by merely purchasing and reselling tulip bulbs, which caused prices to soar. A single Semper Augustus bulb was already valued an astounding 5,500 guilders in 1633. This increased to 10,000 guilders in the first month of 1637, virtually doubling. Putting this amount into perspective, Dash writes, “It was enough to feed, clothe, and house a whole Dutch family for half a lifetime, or sufficient to buy one of the grandest homes on the most fashionable canal in Amsterdam for cash, complete with a coach house and an 80-ft (25-m) gardenand this at a time when homes in that city were as expensive as property anywhere in the world.
In the winter of 1636–1637, when tulip mania peaked, things came to a climax. By that time, thousands of people in the United Provinces, including carpenters, bricklayers, woodcutters, and cobblers, were engaging in frantic trading, frequently in smoky pub backrooms. (Drink had a big part in the overall drunken feeling.) Some bulbs even went through up to 10 different owners in a single day.
Then the tavern business vanished over night. Early in February 1637, the tulip market crashed. This was due to the fact that the majority of investors could no longer afford to buy even the most basic bulbs. The market dried up, and the price of flowers fell to a tenth of what it had been. As a result, many people faced the possibility of financial ruin. Debt disputes continued for many years.
Flowers in a Terracotta Vase by Jan van Huysum was created approximately 100 years after the end of the tulip craze (Credit: Jan van Huysum)
The remarkable thing is that the Dutch thirst for flowers—at least in art—was unaffected by the collapse of the tulip industry. The art of Dutch flower painting endured for nearly two centuries. Tulips can be seen, for example, in Jan van Huysum’s 1736–1737 painting Flowers in a Terracotta Vase. The Dutch Republic was gripped by tulip mania in the 1630s, but curiously, very few flower paintings of any kind from that era have survived. Wieseman: “There truly is this pause in production of flower paintings in the 1630s and ’40s, and I can’t exactly explain it. The excesses of tulip mania and the horrifying memories that resulted from it may have made Dutch art collectors unable to bear to look at a painting of a flower hanging on their walls for a period of time, if not longer.
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When did Holland start using tulips as money?
Scholars and botanists who were exclusively interested in studying this gorgeous bloom began by trading one seed with a certain pattern for another. In order to facilitate the exchange of seeds amongst botanists, the Dutch Republic at the time even had its own organization (founded by botanists). But suddenly, a large number of unrelated individuals began to ask for seeds and, in particular, blooming flowers in exchange for cash.
This was advantageous for the bubble since, in the 1620s, the Dutch Republic, now known as the Netherlands, reached its zenith and, as a result of its effective trading networks, was recognized as the richest nation in the world.
Everyone needed tulips because they were a new fashion statement. It even reached the point that middle-class people who previously refrained from purchasing luxuries due to cost began setting aside money for tulips, which they once again did not require. The tulip became into more of a status symbol for people, much like an expensive car, watch, phone, or other item.
Someone offered botanists who owned what was then regarded as the most beautiful tulip pattern (Semper Augustus) 12,000 guilders for 10 tulips in 1623; this is equivalent to $720,000, or about the same price as a house, and many times more than the average person would earn in a lifetime in the 17th century.
The tulip craze truly got started in the 1630s when new varieties and patterns of tulips appeared that were increasingly more beautiful than the ones before them. Adults who were compelled to saturate their gardens with these beauties treated the flower almost like a collectible. The issue was that there were so many different types with so many distinctive patterns that it was impossible to maintain a consistent price. According to what historian Mike Dash said in his book Tulipomania: The Story of the World’s Most Coveted Flower and the Extraordinary Passions It Aroused, the rarity of the flower appears to have been the primary factor in determining the price of tulips. By 1933, people were literally buying houses with tulips, and the other party was insane enough to trade their property for a flower. At that point, tulips were being utilized as currency.
This is where the idiocy depicted in Jan Breughel’s artwork at the beginning of the article begins to manifest itself. He portrays these insane individuals as “Because it was merely a flower at the end of the day and didn’t actually provide the value for which people were paying, they were just brainless monkeys. How can a flower take the place of a home? Furthermore, who in their right mind would trade a home for a flower that would wither away after a few months?
People within it are having their brains locked in a system of economics that is mostly driven by speculation, which is why it is dubbed a bubble “History has shown that trends typically don’t last very long.
People who aspired to become wealthy quickly were the main factor in the creation of the economic bubble. More and more people wanted to get into it as the price rose because there were numerous instances of merchants who became incredibly wealthy by simply selling tulips. A single Semper Augustus tulip bulb cost about 5,500 guilders ($330,000) in 1633. By 1637, the price had nearly doubled to 10,000 guilders ($600,000), or more than half a million dollars for a flower.
The economic increases caused by these flowers were absurd at the time because you could nearly live in luxury for your entire career without lifting a finger. Additionally, at this point, the supply of new merchants began to somewhat balance the demand for flowers.
Where can you find tulips that cost more than gold?
Legend has it that tulips were more expensive than gold in 17th-century Holland. When the ambassador to the United Provinces (now the Netherlands), a part of the Ottoman Empire, sent tulips to Vienna, these were the first tulips to arrive in Europe.
Why did tulips hold such value in Holland?
By Hendrik Gerritsz Pot, Wagon of Fools, 1637. Flora, goddess of flowers, rides to their demise in the sea alongside drinkers, money changers, and the duplicitous goddess Fortuna, followed by Haarlem weavers who have abandoned their looms and are being carried by the wind while raising a flag decorated with tulips.
an Earl Thompson-developed standardized pricing index for tulip bulb contracts. Between February 9 and May 1, Thompson had no pricing information, therefore the direction of the fall is unknown. It is well known that the tulip market dramatically crashed in February. [44]
Professional growers rapidly increased their payments for bulbs infected with the virus as demand for the flowers increased. Speculators started to enter the market in 1634, partly due to French demand. [45] Throughout 1636, the contract price for unusual bulbs grew. By November, the cost of typical, “unbroken” bulbs had also started to rise, and by the end of the year, any tulip bulb could command hundreds of guilders. The Dutch established a regulated futures market for buying and selling contracts to purchase bulbs at the end of the growing season that year. [46]
Buyers had to pay a 2.5 percent “wine money” fee, up to a maximum of three guilders every trade, and traders convened in “colleges” at pubs. No initial margin or mark-to-market margin was paid by either side, and all contracts were made with specific counterparties rather than the Exchange. Due to the fact that no bulbs were really exchanging hands, the Dutch referred to tulip contract trading as windhandel (translated as “wind trade”). The entire transaction took place outside of Dutch economic activity, not at the Exchange. [46]
After gin, herrings, and cheese, the tulip bulb was the Netherlands’ fourth-largest export by 1636. People who had never seen the bulbs speculated on tulip futures, which caused the price of tulips to soar. Many guys experienced overnight success and failure. [47]
Jean-Lon Grme wrote The Tulip Folly in 1882. While troops destroy flowerbeds in an attempt to stabilize the tulip market by reducing supply, a nobleman guards an extraordinary bloom.
The winter of 1636–37 saw the height of the tulip frenzy, with five contracts being exchanged. Due to the sudden collapse in tulip bulb contract prices in February 1637 and the subsequent cessation of tulip commerce, no deliveries were ever made to fulfill any of these contracts. [48]
When buyers reportedly declined to attend a normal bulb sale in Haarlem for the first time, the collapse there is said to have started. This might have been due to the bubonic plague outbreak that Haarlem was experiencing at the time. A culture of fatalistic risk-taking that enabled the speculation to soar in the first place may have been influenced by the presence of the plague; this outbreak may also have contributed to its eventual deflation. [50]
The issue of settling hundreds of contested sales persisted after the market crashed. The issue was brought to the Court of Holland, which instructed each city to halt all tulip agreements while it conducted an investigation and made its own decisions. In Haarlem, where the courts were closed to tulip matters and the parties were left to settle their own conflicts through arbitration or another method, the procedure took the longest. Even while some producers were adamant about getting paid in full, it was easier to agree on terms that the purchasers could really meet. [51]