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Tulpenwindhandel

When Bob Dylan wrote “Blowin’ in the Wind”, he could have been writing about the incredible avarice that blew the tulip trade into the wind in the 1630’s. Tulpenwindhandel is the Dutch term used in the early 17th century to define the insanity we know call Tulipmania, and it translates literally into English as the “Tulip Wind Trade”.
What happened was due to a convergence of new technologies, combined with the suspension of reality and humans’ capacity for sheer greed, much like the recent “dotcom” bubble. It was also fuelled by a trend that was a precursor to Valentine’s Day, in which French noblemen were desirous of being the first to regale a young lady at the Court of Versailles with the latest Tulip to place in her bosom.
As with so many cataclysmic events, this started with rumors in 1558 of some wonderful new flowers believed to have arrived in Europe. Most of these new flowers were understood to be in the possession of Carolus Clusius, a noted botanist of the era, and for whom one famous tulip is named, tulipa clusiana, or the dainty “Lady Tulip”. Little by little, tulips were owned by other wealthy merchants and nobles, but due to their rarity were extremely expensive. At one point, Clusius’ was robbed of many of his bulbs and subsequently, the Tulips became more readily available in Holland.
Tulips were thought to have first arrived in Holland around 1562, and within fifty years there was a reasonable interest in these flowers, although a modest supply dictated that any involvement with tulips required a reasonable fortune. Most of the enthusiasm was by collectors and growers, who delighted in their new additions, and a profit was to be made by growing the bulbs. It was noted that each year a tulip often produced a flower that was different than from the year before, and offsets grown from a specific variety would often grow differently. The tulip blooms would “break”, that is the solid colors would become striped, feathered or flamed. At that time the growers did not know that it was a mosaic virus, ‘Tulip Breaking Potyvirus’ TBV, carried by green peach aphids, Myzus persica, that was causing the tulip to break. European growers were discovering the wonders of Persian flora, and were importing many, many plants and shrubs, and amongst these were peach trees, host to these aphids.
We know that flowers were very popular in Northern Europe, and tulips in particular, as they had replaced religious themes as being desirous for the home. This was now possible, only because of the reformation of the church by the likes of Luther, Calvin and Tudor rulers in England. Wealthy merchants paid exorbitant amounts to have beautiful paintings by the likes of Ambrosius Bosschaerts and Jan Breughel I adorn their houses. These paintings were even rarer than the tulips they depicted, but they illustrated the product wonderfully.
It is unlikely that the Tulip craze would have developed as it did without the marketing of the bulbs using illustrations, in effect one of the earliest forms of print advertising. In the spirit of commerce, a new technology, that of the printing press was harnessed to create and illustrate the new tulips in all their glory. Black and white wood-cuts and engravings were then hand-colored and distributed to potential buyers. These were so seductive that they fueled the demand for the next season’s tulip bulbs. In reality they performed a function much like the catalogues of today, yet the glory of these hand colored prints was so new and available to so many people they encouraged the purchase of the bulbs.
The final twist was that people who purchased these bulbs found that when they were planted, would often produce flowers that were different and more spectacular than the illustrations, and clearly many more were inferior. This element of the unknown played into the investors’ hands and a wildfire of speculation was set ablaze. With the aid of the illustrations, people started buying and betting that their bulbs would be extremely valuable. An informal exchange was set up to enable the trading of “futures” based solely on expectations, and with a value absolutely disconnected from reality. Spectacular tulips such “Semper Augustus” a white tulip with irregular blazing red flames rising from the calyx increased demand, until many people in Holland were invested in these bulbs. By the early 1630’s bulb prices were doubling by the week, trades were made on a delayed payment basis, with sellers offering tulips they did not possess and for which they had not been fully paid, much like margin positions held in the dotcom bust.
In late February 1637, the growers realized they were going to be the victims if the bubble burst, and instituted the Amsterdam Accord to attempt to protect themselves. The accord held that all sales prior to 1636 were to be honored, and any speculation thereafter was invalid. Most Dutch officials did not share the growers’ concerns, and the Accord went to the High Court in Holland for a resolution. The High Court was in no way charitable to the growers, feeling that it was they who had fuelled the fire of speculation and in April 1637 ruled that all the deals were invalid.
Alas, the litigation was soon proven to be irrelevant as prior to the court decision the bubble had burst, fortunes were lost, many lives ruined, and tulip bulbs returned to being an item of relatively marginal economic importance.