Tulip mania: what happened in the Dutch tulip trade of the 1630s

1. 1593The botanist Carolus Clusius takes up his post at Leiden and plants his tulip collection in the university’s new botanical garden. Dutch tulip growing is usually dated from here.
2. 1620sRare “broken” varieties become a luxury among wealthy collectors. Semper Augustus, red flames on white, is the most celebrated and almost never for sale.
3. Mid-1630sPeople outside the circle of collectors join the trade. Dealing moves into taverns, in contracts for bulbs still in the ground, with payment due the following summer.
4. Winter 1636–37Contract prices rise steeply from late 1636, for common varieties sold by weight as well as for rare ones. Many contracts are sold on several times.
5. 3 Feb 1637In Haarlem a routine tavern sale finds no buyers at the expected prices. This is the date usually given for the turn; word spreads from town to town over the following days.
6. 5 Feb 1637At Alkmaar an auction of bulbs for the benefit of an orphaned family still fetches very high prices. It is remembered as the peak, held before the news from Haarlem had taken hold.
7. Late Feb 1637Delegates of the growers meet in Amsterdam and propose a settlement under which the most recent contracts could be cancelled for a fraction of the agreed price.
8. April 1637The provincial authorities in The Hague decline to rule on the contracts, suspend them, and send disputes back to the towns to settle.
9. 1638Haarlem and other towns settle the remaining disputes, in general by letting buyers out of their contracts for a small part of the price.

• No new institution came out of it. The disputes were settled town by town, largely by compromise, and many contracts were simply never honoured or enforced.
• The courts’ reluctance to enforce the contracts mattered. A promise to pay later that a court will not enforce is close to a free option for the buyer, and people at the time understood that.
• The tulip trade itself went on. The Dutch Republic remained the centre of commercial bulb growing, and rare bulbs continued to sell for high prices to collectors.

• The trade was in contracts for later delivery, not in flowers. Much of what looked like a price was a promise that had not yet been tested by anyone paying.
• A price that is rising because each buyer expects to sell to the next one depends on the next buyer arriving. When one sale fails, the reason for all the others goes with it.
• Whether a contract can be enforced is part of what it is worth. That is as true of a modern derivative as of a tavern agreement.
• The story most people know is a later retelling. How an episode is remembered and what the records show are often different things.

These are observations about how markets and rules work, drawn from one episode. They are not advice, and they do not say that anything like it will or will not happen again.

It is easy to judge an episode once its ending is known. This exercise takes three moments from the timeline above, one at a time. At each it shows only what had been made public by then, asks a hypothetical question with three plain choices, and then shows what came next and what each choice would have meant.

The text headed “what had been made public by then” is this site’s own summary of the record, written afterwards. It is not a contemporary document and nothing in it is a quotation. The position described is imagined. No choice is marked right, there is no score, and nothing is stored.

A hypothetical for study, not advice. It does not say what anyone should have done then, or what to do now.

The scale of tulip mania is disputed. The dramatic version, with ruined families and a wrecked economy, comes mainly from moralising pamphlets of the time and from Charles Mackay’s popular account of 1841. Historians who have gone through the notarial and court archives find that the trade involved a fairly small number of merchants and craftsmen, that few bankruptcies can be traced to it, and that the Dutch economy was not visibly harmed. Price records are patchy and come mostly from the very end of the boom, so no reliable price series exists and none is given here. Even the date of the first failed sale is traditional rather than certain.

Did tulip mania ruin the Dutch economy?

The evidence says no. Historians working from town and court archives find few bankruptcies linked to tulips and no sign of a wider slump. The picture of national ruin comes from satirical pamphlets of the time and from much later popular retellings.

Did one tulip bulb really cost as much as a house?

Some contract prices for the rarest bulbs were recorded at sums comparable to a good house in Amsterdam, and that comparison is often repeated. But many of those contracts were never paid, the records are thin, and historians disagree about how far the famous prices reflect real transactions. This page gives no figure for that reason.

Why did tulip prices stop rising in February 1637?

No single cause is established. The usual account is that buyers failed to appear at a sale in Haarlem in the first days of February and that confidence went from town to town within days. Suggested reasons include prices having run beyond what anyone would pay to plant, the approach of spring when contracts would have to be settled, and plague in Dutch towns thinning the meetings. None is proven.

• Liquidity
• Volatility

Modern archival histories of the tulip trade, economic historians’ studies of the surviving contract prices, and the seventeenth-century pamphlets themselves, read with care.

A number is given on this page only where it is famous and certain. Nothing here is a quotation.