Tulipomania - Mike Dash [77]
That was the reason for the crash, but not for the sheer extent of the collapse in prices. The explanation for that catastrophe lies in the extraordinary rapidity with which bulbs had passed from one hand to another at the height of the boom. In most bull markets there are also bears, who hold back capital and wait for prices to fall so they can buy valuable stocks cheaply. But the majority of the tulips that were traded in the last month or two of the mania—the pound goods and some of the varieties sold by the thousand aces—were literally worthless. There was no demand for them, no connoisseur would plant them, and they had value only in the eyes of the people who had traded them. There was nothing there for a bear trader to exploit.
Worse, it would appear that tulip mania had sucked in everyone it touched in the tavern colleges. Few florists had had much capital to spare when they entered the market, and almost none were not now caught in one or more of the complex chains of obligation that the bulb trade had created. A large number had sold or mortgaged their few possessions to finance their dealings in the bulb market. Those who were in this desperate position faced not merely loss but ruin; and in the seventeenth century, even in the Dutch Republic, ruin meant not just destitution but consignment to the workhouse or even starvation and an early death. The last thing any of these people wanted to do was bid for another tulip. Every florist was a seller now.
That is not to say that prices fell instantly and simultaneously throughout the United Provinces. Some florists did move about from town to town, but most did not, so news took a day or two to travel. And in any case the Dutch bulb trade was really a number of separate markets, one in each of the towns affected by the tulip mania. Prices in one city lagged behind those in another; the florists traded different bulbs; the tulip traders who met in one tavern were subtly different from those who made up every other college in the republic.
Thus, while the tulip trade was in ruin in Haarlem, it continued to flourish briefly elsewhere. In Amsterdam—where news of the disaster in Haarlem must have reached the colleges by Wednesday—it was still strong on Friday, February 6, when a pound of Switsers was sold for 1,065 guilders in the college of a tavern called The Mennonite Wedding. But the trade in Amsterdam seems to have approached a similar crisis point the next day, February 7, when a florist named Joost van Cuyck bid eleven hundred guilders for another pound of the ubiquitous Switsers owned by Andries de Bosscher. Van Cuyck seems to have had second thoughts about the wisdom of this purchase, since he asked de Bosscher to guarantee him that the price would not fall. De Bosscher produced a colleague named Pieter van de Cruys, who was prepared to promise him twelve hundred guilders for the bulbs, but even this did not entirely satisfy van Cuyck. He seems to have had doubts that van de Cruys had the means to make good his guarantee, and so on February 11 he went with de Bosscher to a local notary to put the whole agreement down in writing and make it legally binding. That must mean the deal was still alive eight days after Haarlem’s florists had been unable to sell pound goods at one thousand guilders a pound, and that the trade in Amsterdam survived for at least a week after the initial crash. Nevertheless, van Cuyck’s evident concern suggests that once the news from Haarlem had sunk in, trepidation quickly began to undermine confidence in the surviving centers of the tulip trade.
The same thing happened to the south, where lucrative trades were still being made in The Hague on February 4. One that we