Tulipomania
Page 22
From these figures it can be seen that the prices obtained during the hyacinth craze were an order of magnitude less than those of the tulip craze. Staaten Generaal sold for around two hundred guilders, where an Admirael van der Eijck might have fetched nearly two thousand, and the highest prices recorded for double hyacinths, at about sixteen hundred guilders per bulb, were at best only a third as much as the most coveted tulips had fetched a century before. In addition, individual speculators appear to have been a little more cautious than their forebears. The one significant innovation of the hyacinth craze was the practice of buying shares in particularly valuable bulbs, a practice that does not seem to have occurred during the tulip mania. It must have been a frustrating business, in that the shareholders would have to wait a year or more for their flower to produce offsets before they could expect to receive a single bulb of their own, but it was at least a cheap way of buying into hyacinths; one lengthy Dutch poem, Flora’s Bloemwarande, which described the new trade, mentions a florist named Jan Bolt, who sold a half-share in one of his bulbs to a hesitant customer, with only 10 percent down.
There were several reasons why the hyacinth trade never matched the tulip mania in magnitude. To begin with, hyacinths are much more difficult to grow than hardy mountain flowers such as tulips, which limited the number of garden lovers interested in buying them. This in turn meant that demand remained at a lower level than it did during the years of tulip craze; hyacinths attracted much less attention than tulips had done, which kept the number of speculators attracted by the trade to a minimum. Most significantly of all, there is little evidence for any sort of futures trade in hyacinths; there are one or two mentions of bulbs being purchased and then sold to third parties, but nothing more.
Nevertheless, at least a few private enthusiasts in Haarlem and The Hague seem to have been sufficiently caught up in the hyacinth craze to attempt to grow the flowers themselves for profit, and at its peak there was considerable disapproval for the new craze. Memories of the tulip mania evidently remained vivid, for one enterprising publisher reprinted the three Samenspraecken of Gaergoedt and Waermondt, prefacing the dialogues with the comment that the present-day speculators were just as greedy as their ancestors and just as taken in by tawdry deceits of that wily old whore Flora. Others produced new tracts warning against the excesses of the hyacinth trade. With the awful lessons of the tulip mania so fresh in every mind, it might be said that the most remarkable thing about the new craze was that it occurred at all.
The story of the tulip can be brought up to the present day in a very few words. The trade has continued to be dominated and driven forward by Dutch growers. Indeed, for much of the eighteenth century a single group of a dozen Haarlem florists effectively controlled the entire business. Even when their oligopoly was broken during the Napoleonic Wars, the reputation of Dutch farmers remained unparalleled, and as more and more people took up gardening as a hobby and worldwide demand for flowers of all sorts soared, the area around Haarlem given over to the cultivation of bulbs increased too. First farms appeared in Bloemendaal and Overveen, just to the west of the city; then cultivation expanded south toward Hillegom and Lisse on land made available by the draining of the Haarlemmermeer in the middle of the nineteenth century. It was around this time that individual bulb farms expanded in size too, creating the first of the huge tulip fields that have become one of the most popular picture-postcard images of Holland. Next—with almost all the fertile land around Haarlem given over to flowers—a portion of the bulb trade moved away from the city altogether. Today more tulips are produced by the farms of North Holland than come from Haarlem.
There have been other fundamental changes too. Bulb growers have now mastered the techniques necessary to produce tulips all year round. By keeping bulbs at low temperatures in a state of suspended animation, it is now possible to have them flower as desired. The long wait for the next tulip time, which frustrated flower lovers for centuries, no longer exists, and with it has vanished the single most essential precondition of the tulip mania.
Most fundamentally of all, the tulip itself has changed. In the 250 years that have passed since the mania subsided, Dutch farmers have introduced several radically different species to gardens, from parrot tulips, with their twisted leaves and big, beak-tipped petals, to double tulips, with their extra complement of petals, to Darwins—hybrid giants first bred in the nineteenth century. The broken tulips that once achieved such fame, on the other hand, no longer exist. Weakened as they were by the mosaic virus, the original species—including even famed varieties such as Viceroy and Semper Augustus—were in any case doomed to flourish for only a short time, but even their successors are long gone now; for years the only flared and flamed tulips available to gardeners have been imitations produced by careful cross-breeding.
The bulb industry views the destruction of the mosaic virus as one of its proudest achievements, and with good reason. It is the florists’ equivalent of the elimination of smallpox. Yet it can hardly be denied that something has been lost in the winning of this war. The infinite variety that each broken tulip could display is gone, and with it much of the flower’s capacity to fascinate and astound.
Today the bulb trade offers not variety but varieties: a huge and ever-growing array of different tulips. The flower lover of Clusius’s day had only a handful of species to enjoy, but now close to six thousand different tulips have been bred, described, and cataloged.
This dazzling array of choice is certainly impressive in itself; yet it unarguably lessens the importance of individual flowers. The modern fashion for expanses of uniform and unicolored tulips would certainly strike the seventeenth-century connoisseur, with his exemplars planted in their own small beds, as rather vulgar; and surely no modern gardener studies his flowers with the intensity of an old-time tulipophile, or knows each one so well.
As for tulip mania—well, that is one virus that has never disappeared. It always was a purely human disease, one that fed on the complementary human emotions of appreciation of beauty and greed for money, and it still breaks out occasionally. There was, for example, a craze for dahlias in France around 1838. Like the tulip two centuries before, this flower was a relative newcomer to Europe, having been introduced from Mexico around 1790. It was soon taken up by horticulturists, who bred numerous new varieties, and the beauty of the new cultivated flowers won widespread acclaim; they were cited to disprove Rousseau’s contention that in the hands of man everything degenerates. For a short while dahlias fetched high prices; a bed of the flowers is said to have changed hands for seventy thousand francs,* and a single dahlia was exchanged for a fine diamond. Then fashions changed and the dahlia, like the tulip, faded from the history books. In 1912 it was the turn of Dutch gladioli to enjoy a very similar—but equally short-lived—boom.
The most recent manifestation of the old virus occurred as recently as 1985, when a mania broke out in China that followed the template of the tulip craze almost exactly. In this case speculation centered on yet another bulbous flower, the jun zi lan plant, or Lycoris radiata—the red spider lily. This lily grows small, funnel-shaped flowers that coil together like a tangled skein of wool. Tremendously long, curved stamens project far beyond the leaves to give the plant a delicious air of delicacy. The spider lily originated in Africa but came to China in the 1930s and was cultivated extensively in the Manchurian city of Ch’ang-ch’un. It was at first a favorite of the old ruling classes of the city, and for a while it was a mark of distinction for a patrician family to grow several different varieties of jun zi lan. The Communist takeover put a stop to the small market for bulbs that had evolved by the end of the 1940s, but the spider lily remained very popular and was eventually designated the official flower of Ch’ang-ch’un. By 1980 it was estimated that half of all the families in the city grew it.
A jun zi lan mania broke out in earnest only a few years later, when the Chinese government allowed a few modest economic reforms. The situation in Ch’ang-ch�
�un was then quite similar to that in Holland during the 1630s. Entrepreneurial activity was encouraged, but while there was plenty of desire to make money and an abundance of energy to tap, there were very few opportunities to invest any surplus cash. In these circumstances, the spider lily growers of the city took advantage of the growing demand for their flowers from neighboring regions, and as prices began their inevitable rise,* speculation in jun zi lan bulbs followed right behind.
In 1981 or 1982, spider lily bulbs were selling for 100 yuan, about $20. This was already a substantial sum, given the low annual salaries prevalent in China. But by 1985 bulbs of the most coveted varieties are reported to have changed hands for the astronomical amount of 200,000 yuan, or about $50,000, an amount that puts even the sums paid at the height of the Dutch tulip craze to shame. Thus, while Semper Augustus at its peak might have commanded between five and ten thousand guilders a bulb, which was four to eight times the income of a well-off merchant, the highest prices quoted during the jun zi lan mania were equivalent to no less than three hundred times the annual earnings of the typical Chinese university graduate—quite a staggering sum.
In such circumstances it is unsurprising that the spider lily craze was short-lived even by the standards of flower manias. It collapsed in the summer of 1985, apparently because confidence in the fledgling trade had been undermined by a series of critical newspaper articles that described the speculation in bulbs as madness. The whole lily bulb market was quickly flooded with panicked dealers desperate to sell, and bulb prices fell sharply. Just as the Chinese boom had exceeded even the heights attained during the tulip years, so the crash, when it came, was still more severe. By the time the market for spider lilies stabilized at last, prices had plunged by anything up to 99 percent.
Ch’ang-ch’un is in northern China, just north of the fortieth parallel and only two thousand miles from the valleys of the Tien Shan. The mania virus had come home at last.
*Even the most common and mundane objects can become rare and costly in certain circumstances. During the Second World War, when military supplies naturally took priority, U.S. servicemen would go to great lengths to obtain bottles of Coca-Cola. On one occasion a single bottle of the drink, worth five cents, was auctioned on the Italian front for $4,000.
*The equivalent of about $18,000 today.
*It would be wrong to see the Dutch tulip mania as unique. Similar booms—by which economists mean exceptionally rapid rises in prices—and bubbles (booms in which a commodity’s price quite outstrips what it is actually worth to anyone other than a speculator) have occurred all over the world throughout the last four hundred years. The objects of speculation vary from the obvious—stocks and shares, land and oil—to the unusual. In the United Provinces themselves there was a boom in investment in the passenger canal system begun in 1630—a genuinely useful development in the transport system that made many men rich— and during the 1670s a bubble involving the erection of elaborate public clocks.
Of all bubbles, however, the one that perhaps resembles the tulip mania most closely was the Florida land boom of 1925. Like the tulip, Florida was exotic, and before 1925 the state was difficult to get to and both unhealthy and swampy. Gradually, however, the construction of new roads and railroads and the draining of the swampland, together with the guarantee of fine winter weather, made it more attractive, and some rich Americans invested in vacation homes in the Miami area. Poorer people were attracted by their example, and local real estate agents were quick to exploit the rising demand for property.
Stories began to circulate concerning the fantastic profits that could be made by buying and selling land in Florida. The famous lawyer William Jennings Bryan bought a winter home in Miami in 1912 and sold it in 1920 for a profit of $250,000. Later on lots purchased for $1,200 could be resold a few months later for $5,000. A lot purchased for $2,500 was resold for $7,800, then $10,000, $17,500, and finally $35,000—the last purchaser being the man who had sold it for $2,500 and had lived to regret doing so. At Snapper Creek Canal land worth $15 an acre in 1913 sold for $2,000 an acre in 1925, and in central Miami land once worth $30 per acre became worth $75,000. Eventually land in Miami became more valuable than property on Fifth Avenue in New York. Much of it was bought on payment of a small deposit by speculators who planned to resell it before their next payments became due.
Money poured into the state. In a twelve-month period beginning in the autumn of 1924, bank clearings in Miami rose from $212,000 to over $1 million, and land transfers tripled. An edition of the Miami Daily News published in the summer of 1925 ran to 504 pages, almost all of it real estate advertising—a world record at the time. It was said there were two thousand estate agents in Miami alone, employing 25,000 salespeople.
The crash came in the autumn, as crashes often do. Speculators had badly overestimated the real demand for land. The number of winter visitors to the state was only a tenth of what had been predicted. People began to default on their loans, and a man who had sold land for $12 an acre and seen successive purchasers pay $17, $30, and $60 an acre was dismayed to discover that all had failed to pay more than their initial deposit, leaving the land to revert to him. From the summer of 1926 the crisis had caused several Florida banks to fail as clearings fell from $1 billion in 1925 to $633 million a year later and eventually to a mere $143 million in 1928. In the latter year, The Nation wrote, “Miami will be the cheapest place in the United States to live…. One of the most pretentious buildings on the beach, whose monthly rate was $250, now rents for $35.”
NOTES
General
A surprisingly large amount is known about the history of the tulip, which enjoyed the good fortune both of being highly regarded and of flourishing when garden writing was at its early apogee. As well as good early summaries such as Sir Daniel Hall’s The Book of the Tulip (London: Martin Hopkinson, 1929), several scarce but excellent regional studies have appeared, notably Michiel Roding and Hans Theunissen’s The Tulip: A Symbol of Two Nations (Utrecht & Istanbul: Turco-Dutch Friendship Association, 1993) and Sam Segal’s pamphlet Tulips Portrayed: The Tulip Trade in Holland in the Seventeenth Century (Lisse: Museum voor de Bloembollenstreek, 1992). The most comprehensive general account, however, is undoubtedly Anna Pavord’s The Tulip (London: Bloomsbury, 1998).
Those interested in the history of the Netherlands in the seventeenth century are also richly catered to, most recently by the publication of Jonathan Israel’s highly acclaimed overview The Dutch Republic: Its Rise, Greatness and Fall, 1477–1806 (Oxford: Oxford University Press, 1998). Social historians have Simon Schama’s rather more controversial The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden Age (London: Fontana, 1991) and A. T. van Deursen’s comprehensive Plain Lives in a Golden Age: Popular Culture, Religion and Society in Seventeenth Century Holland (Cambridge: Cambridge University Press, 1991).
The history of the tulip mania itself, however, remains remarkably obscure, and even now it has never been the subject of an exhaustive scholarly inquiry that makes full use of the mass of raw material available in Dutch archives. Many of the short accounts of the subject are based on badly flawed popular studies, most notably Charles Mackay’s entertaining but misleading Memoirs of Extraordinary Popular Delusions and the Madness of Crowds (Ware: Wordsworth Editions, 1995), which remains in print today despite having originally appeared in 1841. (Much more reliable, though still dependent on secondary sources, is the fairly extensive modern reanalysis by Joseph Bulgatz, published in Ponzi Schemes, Invaders from Mars and More Extraordinary Popular Delusions and the Madness of Crowds [New York: Harmony, 1992], which has, however, attracted very little attention.)
Apart from contemporary pamphlets, collected by E. H. Krelage in De Pamfletten van den Tulpenwindhandel 1636–1637 (The Hague: Martinus Nijhoff, 1942), the most valuable Dutch sources are the solicitors’ acts, which still exist for most of the cities caught up in the mania and record not only some of the (comparatively rare) lega
l agreements for the purchase of tulip bulbs but also the proceedings brought as a result of the collapse of prices in 1637. The extracts that have appeared—most notably those collated by A. van Damme, Aanteekeningen Betreffende de Geschiedenis der Bloembollen: Haarlem, 1899–1903 (a collection of turn-of-the-century journal articles finally collected and published at Leiden by Boerhaave, 1976) and Nicolaas Posthumus, who published both pamphlets and some contemporary source material in “Die Speculatie in Tulpen in de Jaren 1636 en 1637,” parts 1–3, in Economisch-Historisch Jaarboek 12 (1926), pp. 3–19; 13 (1927), pp. 1–85; 18 (1934), pp. 229–40, are in no way comprehensive; van Damme even states that the acts he published were chance discoveries rather than the products of systematic research.
By far the most exhaustive account of the period remains Krelage’s monumental Bloemenspeculatie in Nederland: De Tulpomanie van 1636–37 en de Hyacintenhandel 1720–36 (Amsterdam, 1942), upon which a good portion of the present book is based. It is, however, now in some respects outdated. My general feeling, after reviewing the available material, is that even after sounding the necessary notes of caution about the reliability of the popular accounts, historians and particularly economists remain guilty of exaggerating the real importance and extent of the tulip mania.