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By Root 1087 0

there’s the likely apocryphal story of a sailor mistakenly slicing up and consuming a valuable Semper Augustus bulb with his herring in the home of a wealthy merchant). Weavers sold their looms, farmers their lands and equipment, blacksmiths their forges to get their hands on the money to dive into bulb trading. A group of professional tulip traders, called florists, soon evolved, and money was being made everywhere by nearly everyone, much of it on paper in the form of futures — an agreed-upon price of a specific bulb at a specific time in the future. The tulip trade, because it dealt in a product that its buyers seldom saw, came to be known as the Wind Trade. But the harder the wind blew, the higher the prices rose, and not even the sky seemed the limit.

Then came the February 5, 1637, auction of the estate of Wouter Bartelmiesz Winkel, one of the richest men in the town of Alkmaar. Wouter Winkel had managed to acquire through shrewd trading a valuable collection of some seventy-five top-of-the-line specimens — in addition to a goodly load of more common, though still valuable, flowers — including a rare Admirael van Enkhuizen, some Viceroys and various Brabansons, not to mention a few rare Rosen Admirael van de Eijacks, and others. After his death, his seven orphaned children were left to collect the proceeds of the auction: almost 90,000 guilders!

Though on the face of it the Wouter Winkel auction appears to have been a good thing for the Wind Trade, it seemed instead to have been the straw that broke the camel’s back. Indeed, just two days earlier, in a tavern in the city of Haarlem, in a regular trading session of florists, an offering of tulips did not sell, even after the auctioneer repeatedly dropped the price. Word spread across Haarlem, then to other trading towns, and with it went a panic that grew at an even faster pace than the mania that preceded it. It was as though those few fateful minutes in that Haarlem tavern were the reawakening of common sense among the speculators, a feeling that, like the contents of Pandora’s box, once unleashed could not be recalled.

Prices plummeted. A tulip worth 5,000 guilders before February 3 sold for 50 guilders soon thereafter. The fortunate speculator would see a 5 percent return on his prebust investment; most would be lucky to get back 1 percent of what they invested.

Of course, Tulipomania was a bubble built on a dream, a case of supply and demand tripping over one another for a few frantic months until finally neither could stand. And, as was her wont, Mother Nature had the last laugh on the speculators and opportunists: in the wild, tulips were a solid color, usually red, yellow, or white, unlike their cultivated brethren. The cause of the riot and intensity of colors and varieties of Dutch tulips, including the most highly valued Semper Augustus, was a virus, a disease unique to the tulip!

In the end, the Dutch mania for tulips cost many of the speculators, collectors, and florists fortunes that were never to be recovered. Unlike later speculative bubbles that burst after over-expansion, Tulipomania never did reach into the core of the nation’s economy. Private fortunes and personal holdings were lost to the tune of uncounted millions of guilders — again, many of these fortunes existed only on paper to begin with — but the Amsterdam stock exchange kept well away from the Wind Trade. Thus, the effects on the Dutch economy were negligible at best, but it remains a national embarrassment and, of course, a handy object lesson with which the pundits can chide modern-day dot-commers…even as they continue to stock up on scarce Beanie Babies and rare Pokémon and Magic cards as a hedge against the future. And a future opportunity to retell the rise and fall of Tulipomania.

You Sent Whom, Governor?

It seems no one is immune from the occasional colossal blunder. In this case the blunderer did rather better later on in life, at least to the thinking of most Americans. A few British may still harbor a different opinion.

GEORGE WASHINGTON

“NEVER SEND A BOY TO DO