The simple garden tulip has an impressive past - it once triggered one of the most impressive speculative economic bubbles and collapses of modern times.
The tulip has a lurid history. This innocent spring flower caused one of the greatest investment crises of all time. It started simply, long ago in Central Asia. The tulip was a wild flower when traveling merchants noticed it blooming along the Silk Road. Around the year 1000 AD Turkish travelers dug up a few bulbs and brought them home. They called the flower lale and began to breed it. Tulips were popular throughout the Ottoman Empire, and their simple, elegant form became stylized in Islamic art.
By the 1500's the Ottoman Empire was expanding, threatening the powers of Central Europe. Hapsburg Austrian Emperor Ferdinand the First sent diplomatic emissaries to negotiate with the Ottoman leader, Sulieman the Magnificent. Although the first emissaries were killed, eventually an emissary named Ogier de Busbecq achieved a peace settlement between the Ottoman and the Hapsburg Empires. Hapsburg family politics are too complicated to explain here (and possibly anywhere), but for a while the family ruled most of Catholic Europe. During their rule, the Netherlands, or Low Countries were first an Austrian and then a Spanish Hapsburg possession. De Busbecq was originally from the Netherlands but because he had political ambitions, he had left his homeland for the Hapsburg capitol. On his return to Vienna, de Busbeq brought Turkish tulip bulbs to his friend and fellow countryman Carolus Clusius, the Imperial Gardener. They called the flower thoulypen, a Turkish word that means turban and probably refers to the flower's shape.
In 1593, Clusius retired from his position in Vienna and returned to his home in Leyden, where he became a professor of botany and keeper of the local botanical gardens. He brought his tulips with him and they flourished in their new home. By this time the country we call Holland had rebelled against its Spanish Hapsburg rulers and become an independent country under Protestant rule. However, information and material passed freely between Holland and Flanders, the part of the Netherlands still under Catholic Hapsburg rule, and word of the beauty of the new flower spread through the Low Countries. Buyers approached Clusius, but he priced his bulbs so high that they were out of reach for most gardeners. Instead of buying, horticultural fanatics stole the bulbs, and soon they were flourishing everywhere.
Now the plot thickens. An insect that usually infested Dutch peaches and potatoes found a new home in the tulip bulb. It carried the mosaic virus, which infected and began to affect the tulips but did not kill the bulbs for some time. While the tulips lived, the virus caused their blooms to mutate producing brilliant flames of color and ragged broken petal shapes. These new tulip forms were sometimes called Bizarres and Bybloemens, and eventually came to be known as Rembrandt tulips. It must have been amazing to Dutch growers to watch the process take place. They had no understand of the virus that was at work on their gardens, and the continual changes taking place in the new flowers must have been magical and fascinating.
Standard solid colored tulips that had been growing straightforwardly for several years would suddenly break into bloom in unpredictable and stunning splashes of red, yellow, white and brown, with fringed irregular petals. For the rest of these bulbs' lives they would continue this exciting new form of bloom, changing unpredictably into new and ever more spectacular forms. Eventually the virus killed the bulb, but while the bulb lived its flowers became more and more exciting and vivid.
Paintings of the period show how beautiful these blossoms were. These new tulips were so gorgeous and unpredictable that they became highly valued, and a trade in the bulbs developed. Perhaps some sort of virus invaded human minds as well. Soon a speculative bubble economy began to form, not unlike the dot.com frenzy of the late Twentieth Century. Although tulip selling was centered in Holland, the mania spread to Flanders, Germany and France, with buyers paying outrageous prices for especially splendid specimens.
Tulip books, somewhat like modern mail order catalogs, were filled with bound watercolor paintings of the most desirable varieties. These books were also extremely valuable both as a tool for traders, and in and of themselves. There were also pamphlets circulating which explained to potential investors how to break into the trade. A few still survive in Dutch historical societies today.
By 1634, tulips were a status symbol, traded like stocks, with their value soaring so high that one bulb was worth as much as a fine house or a herd of livestock. People invested extravagantly in them, driving prices higher and higher. According to some sources, prices for some tulips rose as high as 3 to 5 million modern dollars. Just as the margin market that underlay the Crash of 1929 was based on speculative potential, the tulip frenzy was fueled by paper shares that might represent ownership of a fraction of a hypothetical bulb, rather than a real object that actually changed hands. Bulbs were priced by weight, and shares weighing a fraction of an ounce sold for thousands of florins, a price equal to the value of acres of good farmland.
The bulb growers themselves began to worry that the situation was getting out of hand, and asked the government to ban the trade, but events were moving too fast to be stopped. In February of 1637, conservative investors began to sell, hoping to protect their profits. Suddenly everyone was selling and the market collapsed. Dealers were no longer willing to honor the contracts they'd undertaken, and government intervention did not help. Tulips once worth an entire estate were now devalued to the price of an onion. Currency became deflated and the entire country and economy suffered a depression equivalent to the Great Depression of the 1930's.
Historians still wonder why a sober country like Protestant Holland went crazy over a flower. Nowadays if a tulip begins to break and show signs that it is virus infected, breeders or gardeners will remove it and its bulb immediately so that the virus does not spread. Modern tulip breeders have taken great pains to develop and preserve tulip strains that have variegation and petal shapes similar to those of the Rembrandt tulips, but without the disease.
These tulips have many of the color characteristics of the old tulips, but they are stable, and will not change form. Such tulips are sometimes called parrot tulips because their jagged leaves resemble parrot feathers. Or they may bear the names of other artists like Matisse or Monet. In this way we can enjoy some of the beauty of the old tulips without their biological damage. These modern tulips are priced to fit anyone's budget, and although they are beautiful chances are they won't trigger another speculative bubble.
