The tulip, which has been a popular garden flower for centuries, is a member of the lily (Liliaceae) family. There are about 100 species extant, native to southern Europe, Asia minor and western and central Asia. Tulips attained great popularity in the Ottoman Empire and were featured prominently in palace and estate gardens. They were introduced from Turkey into Austria in the 16th century. Celebrated botanist Carolus Clusius moved his tulip collection from Vienna to Leiden in what is now the Netherlands in 1594. This set the stage for "tulipomania," the tulip bulb investment bubble that reached its height in the 1630s.
Once the tulip arrived in Europe, its popularity grew, especially among wealthy taste makers. Some say the fires of fashion were stoked by renowned Swiss naturalist Conrad Gesner (1516 to 1565), who saw the tulip in a collector's garden and spread the word about them to friends in other parts of Europe. The most celebrated tulips were those afflicted with a virus that produced color variations in the flowers. Affected bulbs produced blooms, sometimes known as "broken tulips," with dramatic contrasting markings, including stripes, flames or swirls.
Investing in Bulbs
Once the gardens of the wealthy filled with tulips, the Dutch middle class became infatuated with them as well. Prices for individual bulbs rose and even working people spent considerable sums on the choicest varieties. In 1635, a single Von der Eyck tulip bulb cost 1,260 florins. By contrast, a Dutch farmer of the time could buy four healthy oxen for 480 florins.
By 1636, tulip bulbs were traded on stock exchanges in the major Dutch cities. In smaller towns, this trading usually took place in local taverns. Bulbs were treated as commodities that rose and fell in value, and wealthy, middle class and even poor Dutchmen sold other assets--sometimes significant assets--in order to speculate in tulip bulbs. Fortunes were made as tulips continued to hold and rise in value.
Eventually, Dutch tulip prices rose to the point where wealthy people no longer viewed them as a good investment. When the wealthy stopped speculating in tulips, a ripple effect was created in the marketplace and the value of bulbs plummeted quickly. Just as fortunes had been made overnight in the booming tulip market, fortunes were lost overnight when the market "bubble" burst. Several attempts were made at government and judicial intervention, but none were successful. The damage to the economy took years to correct.
Tulipomania was a classic commodities market "bubble" that is still studied by business students today. Entire books and articles have been written on the panic and its aftermath. The passion for tulips that led to the panic continues and the Dutch lead the world in tulip production. With a very few exceptions, the "broken" tulips that captivated 17th-century speculators have disappeared from commerce. Some survive in the "Hortus Bulborum," an 80-year-old institution, where some 2,500 rare species are grown and preserved.