Tulipmania

A number of years ago my dad gave me a book called Extraordinary Popular Delusions and the Madness of Crowds. From a title like that, you can tell it's light reading. Written in the mid-1800's by Charles Mackay, it chronicles fads, or manias as they used to be called, that have affected great numbers of people. Mackay chronicles everything from the witch hunts (Salem, Massachusetts had nothing on the Europeans when it came to hunting "witches") to dueling, alchemy, and popular sayings. But the one fad that really stood out to me the first time I read through this book was what became known as Tulipomania. In the 1600's, tulips first arrived in England and they soon became all the rage throughout Europe, and especially Holland. Certain varieties were so sought after that people were willing to trade almost their entire fortune to obtain one bulb, and soon tulips had their own niche in the stock market. One anecdote tells of a speculator so anxious to buy one of only two bulbs of a certain rare variety that he was willing to offer twelve acres of prime real estate, and another potential buyer offered 4,600 florins, a new carriage, two horses (gray), and threw in the harness as a bonus.

Some of the more humorous stories, at least in hindsight they're humorous, involved people who had no idea of the tulip rage that had engulfed Holland. One unfortunate sailor, upon delivering cargo to a Dutch merchant, spied what he thought was an onion lying on the counter and took it to eat with the red herring the merchant had given him as a tip for the delivery. Later on, when it was discovered the rare bulb was missing, the sailor was hunted down and discovered just as he was finishing off the last of the "onion." The poor chap ended up in jail for several months on a felony charge.

People from all walks of life converted their property into cash and bought tulips. The general belief was that all poverty would be stricken from Holland, so rich would everyone be from their tulip profits.
But, like all good manias, it couldn't last forever. For whatever reason, the more prudent in the population began to sell their bounty, and as more and more tulips were sold, a panic ensued so that those who had agreed to buy tulips once worth a hefty sum were now faced with paying thousands of florins for what was now worth only hundreds. The Dutch government decreed that any contracts made before November 1636, when the fad was at its height, were to be declared null and void and any contracts made after that time could be broken if the buyer paid the seller 10% of the previous value. There was of course, quite an economic shock wave across Holland, from which it took some time to recover. There was some evidence of the tulip fad in England, France, and Scotland, but it never had the same impact  as it did in Holland. Now whenever I see a tulip bulb, I think of onions (with red herring of course).
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