Tulipomania - Mike Dash [54]
Selling short, then, was dangerous, even when the goods concerned were as simple and straightforward as a cargo of Baltic timber. But tulips were an unusually volatile commodity, even by the elastic standards of the futures trade. A merchant who dealt in timber knew precisely what he was buying. A florist purchasing a tulip for delivery at lifting time had no idea. He was gambling on a living thing. To be successful, he needed not just a shrewd understanding of the price his bulb might command in several months’ time, but some idea of what was happening to it while it was still in the ground.
The best way of making money on a flower was to buy one that was about to develop offsets that could be removed and sold separately. Bulbs that were likely to grow rapidly were thus more valuable than either immature flowers or those that were already fully developed and unlikely to produce more than a few more offsets before they died. But even the most experienced growers found it difficult to predict accurately what a single bulb of one particular variety would do, and so far as novice florists were concerned, bulb dealing was an exercise in pure speculation.
In order to give tulip traders the basic information they needed to guess how a bulb might develop after planting, it became customary to indicate the weight of each bulb when it had been returned to the ground. Weights were given in azen (“aces”), an extremely tiny unit of measurement borrowed from the goldsmiths. One ace was equal to rather less than two-thousandths of an ounce—one-twentieth of a gram—and mature tulip bulbs might weigh anything from fifty aces to more than a thousand, depending on the variety. As well as indicating the date on which a flower would be ready for lifting, then, the promissory notes that were exchanged by florists also noted the bulb’s weight when planted, and the ledgers each dealer used to record his purchases always included a column in which the dealer listed the size of his bulbs in aces.
From this it was only a short step to selling tulips not by the bulb but by the ace. In one respect this had the desired effect of making trading fairer. Under the old system of paying by the bulb, a florist would have been charged the same for an immature tulip weighing, say, a hundred aces, which might not produce offsets for another year or more, as he would for a mature specimen of four hundred aces. Paying by the ace, he was charged a price that more accurately reflected the development of the bulb. But the new system also meant that prices increased much more rapidly than before. Most tulips increased substantially in size while they were in the ground, so even if the price charged per ace for a given variety did remain completely unchanged from the moment a flower was planted in September or October until it was lifted the following June, the value of the bulb was still almost certain to increase significantly.
The records of the tulip trade offer examples of just how dramatically the money invested in a single bulb could multiply. A Viceroy grown by an Alkmaar wine merchant named Gerrit Bosch in his garden just outside the city walls weighed 81 aces when it was planted in the autumn of 1636. It had grown to 416 aces when it was lifted in July 1637—a fivefold increase. An Admirael Liefkens in the same garden grew from 48 aces to