Tulip mania in Holland.  Tulip mania in Holland as the first crisis.  Winter tulips, stock exchanges and

Tulip mania in Holland. Tulip mania in Holland as the first crisis. Winter tulips, stock exchanges and "wind trading"

Tulip mania- a short-term surge in the rush demand for tulip bulbs in the Netherlands in 1636-1637.

Prices for tulips of rare variegated varieties reached a thousand guilders per bulb as early as the 1620s, but until the mid-1630s, such bulbs were resold in a narrow circle of flower growers and wealthy connoisseurs. In the summer of 1636, unprofessional speculators entered the lucrative futures trade in tulips. For six months of rush trading, prices for bulbs of rare varieties increased many times over, and in November 1636 a speculative price increase began for simple, affordable varieties. In February 1637, the overheated market collapsed, and many years of litigation began between sellers and buyers of unsecured tulip contracts. A crisis of confidence arose in the circle of participants in tulip mania, and an atmosphere of rejection of gambling stock games was established in society for a long time. Moral contemporaries unanimously condemned tulip mania as an extreme manifestation of unrestrained money-grubbing.

Already in the 1650s, the legend of rampant tulip speculation turned into a myth that has little to do with history. Tulip mania is the first stock market bubble in the history of modern times, a full-scale economic crisis that has undermined the economy of the Netherlands for a long time. Tulip fishing continued to develop and eventually became an important industry national economy. Various explanations of what happened coexist in science; it is impossible to restore the real causes, scope and consequences of tulip mania in a consistent way due to the scarcity and incompleteness of genuine historical evidence. Researchers agree only that in the winter of 1636-1637 something extraordinary happened in Holland, which had no analogues in history before.

The first tulips of Holland

Tulips from the early 17th century

In the middle of the 16th century, the tulip entered Western Europe from Iran and the Ottoman Empire. In the spring of 1559, the first tulip known in Western European history bloomed in Augsburg; in 1562 merchants brought tulip bulbs to Antwerp for the first time. Thanks to the work and authority of Charles Clusius, European monarchs got acquainted with the novelty; the tulip became the favorite flower of the French and German aristocracy for a long time. By the end of the century, it was grown throughout central and northern Europe. Best conditions for this culture developed in the Rhine basin: in the east of France, in the north-west of Germany and in the Netherlands; The light seaside soils of North Holland are especially well suited for tulips. In this "melting pot" in the course of centuries of hybridization of approximately fourteen natural species and an unknown number of Turkish varieties, a new, man-made type of tulip has developed - Gesner's tulip, or simply a garden tulip.

At the end of the 16th century, the center of the tulip industry was based in the north-east of France; bulbs from French gardens were willingly bought by wealthy clients from England, the Netherlands and the German principalities. It was in France that the first rush price increase for tulips in European history took place, about which only anecdotal evidence has survived: in 1608, a miller exchanged his mill for a single bulb; grooms considered such bulbs an enviable dowry. The Dutch became seriously interested in tulips only at the beginning of the 17th century. Probably the reason for this was the Dutch Revolution, during which the national aristocracy was drained of blood. The golden age of Holland had already begun, the country was getting richer, but there were very few really rich people who were able and willing to pay for an expensive hobby. Communities of Dutch amateur flower growers and bulb speculators have not yet formed; in their place were scattered and distrustful groups of people. The upper circle was formed by a few wealthy connoisseurs, much lower on the social ladder were gardeners and pharmacists; even lower were wandering predators - rhizotoms (from Greek: "cutting roots"), combing the gardens of France in search of rare bulbs.

Haarlem in 1656 (north - left). To the right (south) of the city wall is a concentration of small tulip farms and the beginning of the Wagenweg highway

By the beginning of the 17th century, Dutch gardeners had mastered the agricultural technique of tulips; in the second decade of the 17th century, the cultivation of tulips and the trade in their bulbs turned into a full-fledged profitable trade. The oldest tulip farms are located along the Wagenweg highway near Haarlem, following Haarlem, tulips began to be grown in other cities. In 1610, the Dutch began exporting rare bulbs to the southern Netherlands, the German principalities and France, where in 1610-1615 there was a fashion for decorating women's necklines with live tulips. German aristocrats paid generously, but unstable - due to wars and uprisings that regularly broke out. For the same reason, thousands of refugees of all classes moved to the Netherlands every year, and among them - wealthy connoisseurs of tulips. With them, precious bulbs of the Flanders and French selection came into the country, which served as reliable "traveler's checks" for immigrants. The number and variety of cultivated plants has increased; during the 1620s, the tulip went from a rarity to an expensive, but still affordable, middle-class, popular product. Earlier, amateur flower growers exchanged bulbs, in the 1620s they began to buy them. With the end of the economic depression of the 1620s and the beginning of the "Golden Twenty", a stable domestic market for tulips arose in the country.

Tulips of simple, common varieties were relatively inexpensive: two hundred bulbs sent as a gift to the Turkish Sultan in 1612 were valued at only 57 guilders. The greatest profit was brought by the newest varieties that had not yet had time to multiply, so gardeners took up hybridization and selection of tulips, and merchants promoted new products to wealthy clients.

Discovery of variegated varieties


Variegated tulips from the 1630s. Left - ‘Semper Augustus’

In 1580, Karl Clusius (one of the most important European botanists of the 16th century) first observed the phenomenon of viral variegation of tulips. Every year, one or two out of a hundred bulbs are "reborn": the colors of their petals, before that the usual two-color ones, are mixed in a bizarre pattern. Some of these plants turned out to be unviable, others took on ugly forms.

The strongest gave birth to flowers of unprecedented beauty according to the concepts of that time, variegated tulips weakened by viruses multiplied much more slowly, and therefore for a long time remained a desirable and inaccessible rarity for most.

Flower growers, trying to unravel the causes of variegation, set up a lot of experiments, but the mechanism for transmitting variegation remained a mystery; it was only clear that its manifestation could be accelerated by planting variegated tulips next to simple ones. But the main way to create new variegated forms was to lay more and more fields of simple tulips, counting on an accidental "rebirth" and a considerable income. Floriculture turned into a game of chance, which anyone could start with a piece of land and a few ordinary bulbs. By 1633, about 500 forms of tulips were bred in the Netherlands. The nomenclature of variegated cultivars developed rapidly and erratically; with the light hand of the Kennemerland headman, the most exquisite variegated tulips began to be called "admirals", with the addition of the name of the breeder or seller.

The most famous variegated variety, the personification of tulip mania, was the red and white ‘Semper Augustus’ (“August forever”). The first ‘Semper Augustus’ was bred in France; in 1614 the owner sold it for next to nothing to Holland. Ten years later there were about a dozen 'Semper Augustus' bulbs in Holland; they all belonged to some amateur connoisseur. In 1623 he was offered twenty thousand guilders for a dozen bulbs, in 1624 three thousand guilders for one; every time the owner refused. In the only authentically known transaction, an onion with two children was sold for a thousand guilders. The search for ‘Semper Augustus’ in its supposed homeland ended unsuccessfully, none of the varieties of the Dutch selection managed to push the original.

Players

Merchant and tulip fan. Painting-caricature of the middle of the XVII century

One thousand guilders, which was allegedly offered in the 1620s for one bulb, was 10.28 kg of silver or 856 g of gold. The income of a skilled craftsman then did not exceed three hundred guilders a year. A middle-class merchant earned from one to three thousand guilders a year, and only a few of the most successful entrepreneurs had an income of more than ten thousand guilders. In the 21st century, the tulip is an ordinary plant, and at the same time one of the symbols of the Netherlands, but the Dutch of the 16th-17th centuries treated the tulip differently. A whimsical and changeable flower from the far East was a symbol of novelty, unpredictability, it aroused admiration and a desire to possess it. A similar attitude is recorded in both French and English sources, but only in Holland did rare tulips take the place of the highest value in the public mind, along with gold and precious stones. At the same time, the tulip, unlike the stone, could be propagated; he was not only a treasure, but also a profitable investment.

For an enlightened European, a rare tulip was akin to a work of art; he occupied a unique niche. The circle of connoisseurs of tulips and the circle of art patrons overlapped in many ways; the same customers purchased from the same intermediaries paintings by great masters, antique statues and rare bulbs. Of the 21 participants in the first tulip auction, of which detailed records have been preserved (1625), only five dealt with tulips professionally, while 14 buyers were known as collectors of paintings.

By the 1630s, the circle of people who were able to pay for an expensive hobby had noticeably expanded, but it was not massive: in Haarlem, the tulip capital of Europe, 285 by name participated in tulip mania famous people; in Amsterdam only 60, in Enkhuizen 25. All of them were wealthy people, experienced in commercial affairs. There were no nobles, lackeys, or legendary chimney sweeps among them: the people on this list are the owners of prosperous enterprises. There were no representatives of the ruling oligarchy among them. Middle-class flower growers, on the contrary, actively promoted their hobby and willingly bought and sold bulbs. One of them, the surgeon immortalized by Rembrandt, even adopted the surname tulpa(Dutch tulip) and decorated the house with a “tulip” coat of arms of his own design.

Dr. Nicholas Tulp. Fragment of a 1632 painting by Rembrandt

Passion for tulips usually united not just people of the same circle, but people who knew each other well - close and distant relatives, residents of the same street, parishioners of the same church. Society as a whole was divided into closely knit clans, workshops, religious communities, and the result of such a structure was an unusual high level trust within the networks of tulip lovers. A comradely, trusting atmosphere gave false confidence in their own knowledge and skills, and at the same time subordinated their will to rumors and other people's opinions. The Dutchman could not trust competitors from another city, but the opinion of his neighbors and drinking companions was the highest authority for him.

Those who ask a rhetorical question - “how did the rational and thrifty Dutch suddenly become obsessed with tulip speculation?”- involuntarily ascribe to the people of the 17th century the stereotypes of the behavior of the Victorian era. The Dutch of the 1630s, who fought with Spain for independence and religious freedom for half a century, bore little resemblance to the bourgeoisie of the 19th century. Indeed, the Dutch of all classes had a passion for saving and accumulating wealth: even poor artisans annually set aside several tens of guilders. Wealthy depositors of the Amsterdam Bank for five years, 1633-1638, increased the volume of deposits in gold and silver by 60%. Thrift was combined with the general passion of the Dutch for gambling. Dutch society was young not only historically but also physically: in its demographic structure youth prevailed - children and grandchildren of the founders of the state and numerous immigrants. Thousands of Dutch traveled overseas every year, and wealthy merchants financed colonial campaigns and risky projects to drain the polders. The country was experiencing twenty years of unprecedented economic growth, but the life of each of the Dutch, as in the Middle Ages, was under threat. In 1623-1625, the Netherlands experienced a plague; in 1635 the plague returned along with the German troops. In that year, a third of the population died in Leiden, and in Haarlem, plague deaths peaked in the autumn of 1636. The coincidence of the epidemic and tulip mania in time is not accidental: war and plague, the feeling of imminent death, accustomed the Dutch to risk and lifted the last moral prohibitions that kept them from reckless speculation.

Windhandel - trade in air

"Flora's Chariot". An allegorical painting by Gendrik Pot, circa 1640, is a popular lubok plot ridiculing simpleton speculators. The cart with the goddess of flowers and her idle companions rolls downhill into the depths of the sea. Artisans wander behind her, abandoning their tools in pursuit of easy money.

The first signs of tulip mania appeared in 1633 in West Friesland, away from the tulip farms of Haarlem and big money Amsterdam. In the summer of 1633, the price of tulips rose so much that one of the inhabitants of the city of Horne exchanged his stone house for three bulbs; after that, a local farmer exchanged his farm for bulbs. The value of real estate in each transaction was at least five hundred guilders. Earlier, the Dutch bought bulbs for money; in 1633 the bulbs themselves became money. Perhaps the market was warmed up by external demand in April 1632 in the German lands there was a temporary lull, and the German aristocrats began to again buy luxury goods from the Dutch. Perhaps the excitement was warmed up by gardeners-breeders, who released a lot of new products on the market in 1634. Prices for the former favorites of the market have decreased, and with them the threshold for entering the market for new participants has also decreased. The number of bidders grew rapidly, and within two years there was a qualitative change in the tulip business.

The most important innovation of 1634-1635 was the transition from cash transactions to futures trading. In the conditions of the Netherlands, tulips bloom in spring; in early summer, the faded bulb lays the bulbs of a new generation and dies. Young bulbs are dug up in the middle of summer and planted in a new place in late autumn. The buyer can purchase young bulbs from July to October; It is impossible to dig up and replant already rooted bulbs. In order to get around the restrictions imposed by nature, in the fall of 1634, Dutch gardeners began trading in bulbs. in the ground- with the obligation to transfer the dug out bulbs to the buyer next summer. The following season, in the autumn of 1635, the Dutch switched from dealing with bulbs to dealing with contracts for bulbs. Speculators resold each other receipts for the delivery of the same bulbs; in the words of a contemporary, “merchants sold bulbs that did not belong to them to buyers who had neither the money nor the desire to grow tulips”. In conditions of constant price growth, each transaction brought a considerable profit to the seller of the receipt. These profits could be realized next summer, provided that the resold bulb survived and did not regenerate, and that all participants in the chain of transactions fulfilled their obligations. Transactions were secured by notarization, the guarantee of respected citizens (Dutch borgen). The main protection against non-fulfillment of the transaction was, first of all, the business ethics of the "families" and the atmosphere of intolerance to fraud.

The Dutch called such speculation windhandel, "air trade".

In December 1634, a transition was recorded from trading in whole bulbs to trading in aces - conventional units of bulb weight. At first, flower growers used pricing in aces to fix the benefit from the annual growth of the bulb (there is a case when a valuable bulb increased five times over the season). By the autumn of 1635, almost all transactions were tied to the weight of the bulb, and then the conventional unit began an independent life. Transactions “for a thousand aces” of a small child appeared, transactions with shares of an onion denominated in aces, and similar derivative instruments. Sometimes the tulip contracts were essentially insurance deals, sometimes they were cover for ordinary bets (for example, in September 1635, two professional flower growers made a deal to sell a bulb for 850 guilders with a deferred payment of six months, provided that during this time the Dutch army will be able to recapture the Shekenshants fortress from the Spaniards).

Summer 1636 the old system trade through flower growers and respectable amateurs was supplemented by "people's" auctions, which attracted new participants to speculation. In Haarlem, Leiden and about a dozen other cities, “colleges” were organized - clubs of local tulip lovers; their spontaneous organization parodied the structure of the Amsterdam Stock Exchange. The first colleges operated under the roof of parish churches; then tulipomaniacs firmly settled in taverns and taverns, in the suburbs of Haarlem and in brothels. The boards met two or three times a week. At the beginning of the tulip mania, each "session" took an hour or two; in the winter of 1636-1637, the boards met almost around the clock. Wealthy amateurs rarely appeared in colleges; the basis of the public was the local poor, who sought to join the supposedly profitable game in the company of experienced speculators. Rare, expensive bulbs were too expensive for them - in colleges they traded mostly ordinary, inexpensive varieties. It was around them that in the winter of 1636-1637 unjustified excitement unfolded. Trades were conducted on the model of "exchange" auctions; according to the results of each transaction, the buyers paid the seller symbolic “money for wine” (no more than three guilders), and the sellers paid the buyers a “premium”, the amount of which was the subject of the auction. All actions in the colleges were accompanied by copious libations, "the madness of the crowd" in fact was the result of the constant intoxication of tulip lovers. No one was interested in either the solvency of buyers or the ability of sellers to deliver the goods: there was an open, unsecured and unregulated "trade in air" here.

hype

Dynamics of the index of futures (green) and option (red) prices for bulbs in 1635-1637 according to Thomson

All researchers of tulip mania note the paucity of surviving archival data on bulb prices before the hype of 1636-1637 and after the collapse of tulip mania. For example, out of about 400 prices summarized in Maurice van der Veen (2012), only 20 are from before November 1636, and 7 from the second half of 1637 and 1638. The incompleteness of the data allows for various interpretations of the events immediately preceding the peak of tulip mania, but this peak itself is documented in great detail and has clear time limits. Tulip mania in the narrow sense began in the first week of November 1636 and ended in a crash in the first week of February 1637. During the previous two years, from 1634 to the end of October 1636, bulb prices had risen evenly: for example, one ace of the 'Gouda' variety in December 1634 cost 1.35 guilders, in the winter of 1635-1636 2.1 guilders, and in May 1636 it rose to 3.75 guilders. According to economist Earl Thomson's calculations, the price index almost tripled in two years - from 22 to 61.

In the first days of November 1636, prices fell seven times. According to Thomson, the market reacted with a collapse to the news of the battle of Wittstock: with the return of hostilities and peasant uprisings to Thuringia and the West German principalities, the Dutch lost a lucrative market. German aristocrats urgently sold their not yet rooted bulbs, the supply of rare tulips in Holland suddenly increased. A new, low price level for real bulbs has fixed fundamental changes in the market; subsequent explosive growth prices for unsecured tulip contracts was a product of a purely speculative game. Beginning speculators who resold contracts to each other expected to profit from rising prices; flower growers and wealthy amateurs who owned real bulbs and knew their real price expected to earn, if not by selling bulbs, then by compensation from unlucky buyers. According to Thomson, chains of futures contracts have become unrelated options. The redemption rate for such options was not set by law, and the buyers of tulip options assumed that they were not risking anything. There was nothing to hold back the rise in prices for contracts.

In mid-November prices soared again. By November 25, they exceeded the October maximum, in December they doubled. By Christmas, the price index was almost 18 times the November low and continued to rise throughout January 1637. It happened that the same bulb was resold ten times during the "trading session", and each transaction brought the seller a considerable paper profit. Only in Holland, according to Mike Dash, at least three thousand people participated in the auction, and in all the United Provinces - at least five thousand; local boards of speculators appeared in Utrecht, Groningen and in the cities of northern France. Rare varieties and their imitations-paragons rose so much that they were beyond the reach of most tulip lovers - then the boards focused on the trade in "garbage" varieties. A pound of inexpensive, common variety Switzer, which cost 60 guilders in the fall, and 125 guilders in December, rose to 1,500 guilders by the beginning of February. A strange and intolerable situation developed on the market: transactions with real bulbs growing in the ground were carried out at the low prices established in early November, and in colleges speculators resold unsecured contracts to each other for twenty times more. In a society frightened by an epidemic of the plague, there was confidence that the bubble was about to burst; the number of optimistic buyers has declined. The Haarlem tulip lovers were the first to sound the alarm: on Tuesday, February 3, another auction for the sale of "garbage" bulbs failed in the Harlem College. Only one of the bidders agreed to buy, at prices 15-35% lower than the prices of previous auctions. Speculators were confused, and the next day, February 4, trading in Haarlem ceased completely. It took several days for the terrible news to spread across the country, so trading continued on February 4 in The Hague, on February 5 in Alkmaar, and on February 6 in Amsterdam.

The culmination of tulip mania was an auction held on February 5 in Alkmaar, just twenty miles from Haarlem. A collection of bulbs was put up for auction, collected by Wouter Winkel, who died in the spring of 1636, a local innkeeper, amateur flower grower and extremely successful speculator. In July 1636, the seven children of the deceased, placed in an orphanage, managed to secretly dig up precious bulbs. In December, these bulbs, carefully weighed and described under the supervision of a board of trustees, were planted in the ground and waited for their new owners; in contrast to purely speculative transactions with option receipts, the Alkmaar auction sold live, cash goods. The highly publicized auction attracted dozens of the most experienced and wealthy connoisseurs; without waiting for the opening of the auction, one of them bought 21,000 guilders worth of tulips from orphans, including the only bulb of Admiral Enkhusen for 5,200 guilders. At the auction itself, prices reached 4200 guilders per bulb, and in total the orphans gained more than 90 thousand guilders, which in the 2010s is equivalent to about 6 million pounds sterling. The results of the auction, immediately replicated in a printed pamphlet, stunned connoisseurs; the sensation was not the absolute amount, but the increase in prices recorded at the auction. The rarest "Admiral Lifkens", which in the summer cost 6 guilders per ace, went under the hammer at a price of more than 17 guilders, prices for less valuable varieties tripled over the same period. Two days after the Alkmaar auction, the markets of all the cities of Holland collapsed completely and irrevocably; The orphans never saw their money.

Pay

"Allegory of Tulip Mania". Painting by Brueghel the Younger on a popular print, circa 1640

A twenty-fold drop in prices in February 1637 brought buyers of tulip contracts to the brink of ruin. They did not want to pay the sellers, and often could not, but the refusal to fulfill obligations in the then Netherlands with their "families", communities and workshops was impossible. Failure to fulfill an obligation bordered on a crime, bankruptcy forever made the Dutchman an outcast. At first, buyers and sellers tried, in private, to reach an agreement and terminate the onerous contracts with the payment of compensation - but only a few managed to disperse peacefully. The most active, well-organized party in February were professional florists: already on February 7, deputies from the provinces of Holland and Utrecht agreed to hold a congress. Two weeks later, a farmer's convention resolved to seek a statutory minimum of 10% release for transactions entered into after November 30, 1636. The earlier deals, the flower growers insisted, were to remain in place. Most growers signed forward contracts for the sale of bulbs as early as October-November; the fate of numerous intermediaries who resold bulbs to each other, they were not interested.

City magistrates were in no hurry to make a decision. The officials involved in the speculation hoped to resolve the conflict to their own advantage, but the conflict turned out to be too complex and large-scale. In Haarlem, where tensions were particularly acute, the City Council ruled in March in favor of contract buyers, in April in favor of sellers, and then reversed all rulings and requested assistance from the Estates General. Uncertainty has exacerbated the panic among tulip lovers, and has played into the hands of their many opponents. Pamphlets, proclamations and caricatures were printed and distributed throughout the country, vilifying the "mad" speculators. The search for those responsible for the disaster began; Calvinist agitators openly pointed to a conspiracy of Jews, Mennonites and bankrupts (in the Netherlands the latter lived in the position of untouchables). The prudent doctor Tulp permanently removed the coat of arms with the image of three tulips from the facade of the house. Things did not come to witch hunts and pogroms: parliamentarians acting on the recommendations supreme judges, made a decision already on April 27, 1637. All tulip contracts, regardless of the date of signing, have been temporarily suspended; the supreme power washed its hands, entrusting the final decision to the city magistrates. The regents of Amsterdam have decided that the contracts remain in force, and flower growers and tulip lovers retain the right to trial; Haarlem, Alkmaar and all other cities in the Netherlands have declared tulip contracts invalid.

"Flora's jester's cap". A popular lubok plot, thanks to which the nickname “cap-makers” stuck to tulip lovers

A simple solution that forced creditors and debtors to deal with each other privately deepened the crisis of confidence and forever destroyed the atmosphere of trust in the Dutch communities: creditors harassed debtors, and debtors refused to pay and no longer considered such a refusal to be something extraordinary. The intolerance of the “zero option” was first recognized in Haarlem: in January 1638, the first Flower Arbitration Court in the Netherlands (CBS for short) was launched here. The main task The four mediators of CBS were not to establish the truth, but to reconcile the townspeople by forcing them to negotiate. In May 1638, Haarlem worked out a standard recipe for settling the dispute: if the seller insisted on repaying the debt, the debtor-buyer was released from any obligations after paying the seller 3.5% of the contract price. These conditions were not beneficial to either flower growers or debtors-tulip lovers; it was easier for the disputants to disperse peacefully than to seek a formal CBS verdict. Acting according to this scheme, the Haarlem mediators settled all conflicts in their city by January 1639. Tulip mania is officially over, at least in Haarlem; in The Hague and Amsterdam, creditors persecuted tulip debtors in the 1640s. Economist Alexander Del Mar believed that the end of tulip mania came in 1648, with the conclusion of the Peace of Westphalia. Under the terms of the treaty, the Netherlands stopped the free minting of coins, the flow of silver into the country decreased, and only then did the Dutch have to tighten their belts and give up expensive hobbies.

In popular and economic literature, the opinion was established that most tulip lovers went bankrupt, and "the country's commerce was in a state of deep shock, from which it recovered only many years later". In the 21st century, this opinion is supported by the influential economist Burton Malkiel: “this crazy story ended with the shock of the rise and fall of tulip prices leading Holland into a prolonged depression that spared no one.” In reality, no economic crisis, there was no "shock" or at least a mild recession; The "Golden Twenty" continued. In the tulip industry, negligible resources of society were involved, so even the complete death of the Dutch floriculture and the ruin of all tulip lovers would not undermine economic growth. This did not happen, no evidence of ruin due to tulips has been preserved in the archives. In Amsterdam, the number of personal bankruptcies doubled in 1637 compared to 1635, but out of hundreds of bankrupts known by name, only two or three people speculated in tulips. On the contrary, it is known from land records that dozens of prominent tulip lovers bought up real estate in 1637-1638 and clearly had no problems with cash. The most famous "bankrupt of tulip mania" is the artist Jan van Goyen, who had the misfortune to buy a tulip contract on February 4, 1637 - but in fact van Goyen went bankrupt not on tulips, but on land speculation.

Jan van Goyen- portrait by Gerard Terborch

Long-term consequences

The market for rare tulips recovered from the disaster in two years; already in the summer of 1637, real transaction prices approached a thousand guilders per bulb. Probably, then the prices continued their gradual decline. The meager data of the early 1640s indicate that by this time the prices of rare tulips were about six times lower than the prices of 1636-1637 and amounted to one or two hundred guilders per bulb. Following the decline in prices and profits, the number of tulip farms also gradually decreased. By the middle of the 17th century, the entire tulip industry in Holland was concentrated within the city limits of Haarlem; about a dozen surviving households shared national market and controlled the export of tulips until the start of the Napoleonic Wars. Dutch floriculture in the 18th century served as a model for the French and English; an internship in Holland was considered the key to success in floriculture. The memory of the excitement of 1636-1637 became the best advertisement for the Haarlem flower growers and helped them to keep their leadership in the cultivation and selection of tulips - as it turned out, forever. In the 19th century, the city economy could no longer cope with the growing demand, and the Haarlemites planted the first tulip fields on the drained polders of the Haarlemmermeer, which soon became one of the symbols of Holland. When these lands were fully occupied, Haarlem firms established plantations in Hillegom and Liss, and in the 20th century tulip production covered the whole of North Holland. In the 21st century, the Netherlands produces more than four billion tulip bulbs annually and controls 92% of the world trade in them.

The "heroes" of tulip mania, rare variegated varieties, died out a long time ago. Of all the variegated varieties listed in 1637, only ‘Zommerschoon’ has survived to this day. The legendary ‘Semper Augustus’ fell out of fashion by 1665 not only in Holland, but even in England. A hundred years after the tulip mania, ten bulbs of ‘Semper Augustus’ were worth one guilder; in the middle of the 18th century, mention of the variety ceased forever. The old favorites were replaced by new variegated varieties that cost up to four hundred guilders per bulb, and then they fell out of fashion, fell in price, and fell victim to the virus. After the Second World War, variegated tulips - breeding grounds for the disease - were expelled from commercial farms; by 2013, not a single "Rembrandt" remained on the Royal Association's variety register. The variegation of varieties cultivated in the 21st century is not due to a virus, but to artificially induced mutations.

flower booms

Flower "manias" flared up from time to time in the 18th and even in the 20th century. In 1703, with the coming to power of Ahmed III, the "age of tulips" began in the Ottoman Empire. The new sultan, himself a connoisseur and lover of tulips, awakened a new wave of tulip mania in Istanbul society. Taking into account the experience of Holland, Ahmed did not allow open speculation: first he limited the number of flower growers who had the right to trade in bulbs in Istanbul, then he limited the price of bulbs and banned the trade in tulips in the provinces. After the deposition of Ahmed in 1730, the hobby quickly faded away, many varieties of breeding from the beginning of the 18th century perished in desolation. Around the same years, "mania" returned to the Netherlands: hyacinth fever began here. The Dutch, so indifferent to terry hyacinths, suddenly became interested in them. In the 1720s, prices for new varieties of hyacinths rose steadily but slowly. In the 1730s, a rush demand began, which flower growers could not satisfy (hyacinth grows and multiplies much more slowly than a tulip). Exactly one hundred years after the tulip mania, in 1736-1737, hyacinth prices peaked at a thousand guilders per bulb and then collapsed. By 1739, prices for rare hyacinths had fallen 10-20 times. No futures and options were used this time, and the total number of hyacinth speculators was small, so the market crash in 1737 passed without consequences, and the 1736-1737 fever itself was quickly forgotten.

Another century later, in 1838, dahlia fever broke out in France; at the peak of the excitement, a “flower bed” (a conventional unit of small-scale wholesale trade) of dahlia tubers cost up to seventy thousand francs. In 1912, a short-lived excitement around the newest varieties of gladioli began in the Netherlands, interrupted by the outbreak of the First World War. The latest flower "mania" occurred in the 1980s in China around the lycoris radiata, or spider lily, a common ornamental plant widely cultivated in Manchuria both during the empire and under the communists. By 1982, bulbs of rare, newer varieties cost up to one hundred yuan (about US$20); in 1985, prices peaked at 200,000 yuan per bulb, about three hundred years' wages for a skilled Chinese. In the summer of 1985, the black market for bulbs collapsed, prices fell by about a hundred times.

The legend of tulip mania

Title page of The First Conversation between Warmondt and Gargudt. 1734 edition issued at the height of the hyacinth fever

In 1637 a Haarlem publisher published a pamphlet, The Conversation of Warmondt and Gargudt; in the same year, 1637, the first "Conversation" was followed by a second and a third. "Conversations" - the only thing historical evidence detailing the structure of the boards, the "technology" of speculation, and the development of events after the February crash. It is to them that all studies of tulip mania go back, from the chronicle of the 17th century to the works of the 21st century. There are quite a lot of documents of the 17th century about the cultivation of tulips and their trade, but almost all of them either have no direct relation to tulip mania, or do not confirm it in any way. Only about fifty handwritten, hand-illustrated albums and catalogs of tulips have survived, but the prices are indicated in only a few of them, how real or inflated they are - it is not known. The same uncertainty accompanies other documents that fixed prices for rare bulbs - bills of sale, auction reports, court and inheritance cases. According to historians of the 21st century, "Conversations" present the facts reliably and accurately, but certainly biased. This is not a manual on stock trading, but an open sermon against games. The uncritical attitude of later authors to the polemical mood of Roman contributed to the fact that an actually false legend about tulip mania was entrenched in literature and folk tradition.

By the middle of the 17th century, the legend of the collapse of 1637 had become a myth and overgrown with fables. In the 1660s, Aitzema reproduced a critical exposition of the Roman in his six-volume chronicle; in the 1670s, Abraham Mounting, the son of a Dutchman who lost his fortune in tulip speculation, published his own critical description of tulip mania. In 1797, Johann Beckmann's narrative was published and then repeatedly reprinted - a compilation of "Conversations" and numerous historical anecdotes of the 17th-18th centuries. It was Beckman who “introduced” the story of a sailor who ate a precious onion, mistaking it for an ordinary onion, and he also owns the words: “Finally, the onion burst like a soap bubble.” Beckman's argument that no one in their right mind would ever agree to pay hundreds and thousands of gold pieces for "useless rhizomes" long defined the perception of tulip mania as an irrational mass insanity that ended in a devastating crisis. In 1841, Beckmann's interpretation of events was finally consolidated by Charles Mackay's "The Most Common Delusions and Madness of the Crowd".

During the years of the Great Depression, McKay's book became popular in the United States thanks to the work of Bernard Baruch. In the preface to the 1932 reprint, Baruch wrote that it was McKeve's description of tulip mania that helped him save his fortune: he managed to get out of the stock market before the crash of 1929. In the 1930s, the McKee myth became firmly established in the everyday life of politicians and journalists; since then, in the English-speaking world, not a single economic shock, large or small, is complete without a mention of tulip mania. " Detailed descriptions Tulip mania in popular literature has taken on an exaggerated, implausible appearance: for example, in 1997, Management Today columnist Rymer Rigby seriously argued that “By 1630, the once bustling, businesslike, world-famous Dutch economy was completely dependent on tulips…every free square inch of land was devoted to their cultivation…”.

In serious economic work In the first half of the 20th century, the Maccaean myth was hardly used. The situation changed in 1957, when Paul Samuelson introduced into the lexicon of economists the concept of "tulip mania phenomenon" - a market condition in which prices and costs of sellers can rise indefinitely, and can collapse at any unknown moment in time. In the 1960s, tulip mania was fixed in the language of academic economics for a long time as a full-fledged economic term. In the first edition of the New economic dictionary Palgrave (1987), one of the authors of the theory of sunspots, Guillermo Calvo, defined tulip mania as “a state [of the market] in which the behavior of prices for certain goods cannot be fully explained by fundamental economic factors” (in the economy of the 21st century, this formula is one of the definitions of a financial bubble ). However, this approach was by no means universal: in the same 1987, Charles Kindleberger in his “ financial history Western Europe' believed that any speculative crisis was necessarily preceded by an abnormal expansion of the money supply, and in the 17th century, in the absence of banking system, it was impossible. The Kindleberger critic, libertarian Douglas French, believes that money supply Netherlands expanded rapidly without bank loan, due to income in gold and silver from colonial trade and piracy, i.e. tulip mania was a spin-off economic policy United Provinces, which encouraged the flow of wealth into the country.

Latest Research

The revision of the McKean myth began in 1989 with an article by Peter Garber in the Chicago Journal of Political Economy. After examining the sources available to Beckman and McKay, he came to the conclusion that the canonical description of tulip mania is nothing more than a legend generated by the propaganda of the 17th century. The driving force behind this legend was the desire of the Dutch business elite to cut off the flow of investment in the shadow and speculative sectors of the economy. Emotional statements about exorbitant prices to "useless rhizomes," Garber believed, cannot replace scientific fundamental analysis seventeenth-century markets, an analysis his predecessors neglected. Summarizing archival data on the prices of tulips, Garber argued that the surge in prices for rare varieties in the 1630s was not an irrational anomaly. Only the drunken frenzy of non-professional speculators of "garbage goods" in the collegiums was abnormal. In the market for rare tulips, prices reflected the expectations of competent sellers and buyers, and followed a familiar pattern. life cycle new product. Tulip mania, according to Garber, was neither a "mania", nor a "bubble", nor a "crisis"; it did not influence the development of the country and could not do it.

In 2006, Californian economist Earl Thomson (1938-2010) put forward an alternative explanation for tulip mania. He believed that the main reason for the rise in prices was an implicit change in the rules of the game in the market - the transition from conventional forward transactions to risk-free options. Thomson's main conclusion was in line with Garber's: Tulipmania is "a remarkable example of efficient market pricing, in which option prices roughly match the expectations of knowledgeable sellers." Thomson's work has also been heavily criticized from various quarters.

In historical science, the revision of the Mackeve legend was consolidated by Ann Goldgar's "Tulip Mania" published in 2007 - a convincing work based on a mass of new archival materials. Goldgar not only outlined the sequence of events, cleared of later distortions, but also tried to clarify the place of floriculture in the life of the Dutch of the 17th century, and the reasons why such a phenomenon left such a long and incorrect memory of itself. The main motive and conclusion of the book - tulip mania was a sharp shock, unexpected for contemporaries, of the ethical foundations of society. Its collapse did not directly damage the country's economy, but forever changed the Dutch business climate. Tulip mania is still mentioned both as a symbol of the economic crisis, and as an example of "delusions and madness of the crowd", including top-ranking financiers. For example, the former finance minister and chairman central bank The Netherlands’ Nut Wellink, speaking out in a 2013 denunciation of cryptocurrencies, said that “Bitcoin is worse than tulip mania. Then, at least, you got tulips for your money…”.

Chart of the cost of Bitcoin to USD from the site:

A turbulent period in Dutch history when the demand for bulbs began to outstrip supply and the commodity reached an unbelievable price.

One of the foreigners intrigued by tulips was Ohir Gilen de Bouzbek, the Austrian ambassador to Turkey. (1555-1562). He brought some bulbs from Constantinople to Vienna, where they were planted in the gardens of Ferdinand I, the Habsburg emperor. There the tulips blossomed under the expert supervision of Charles de Lecluse, a French botanist better known by his Latin name Carl Clusius.

Soon the fame of Clusius attracted the attention of the University of Leiden in the Netherlands, and he was persuaded to become curator of the university botanical garden. In October 1593, with " a secret stockpile of tulip bulbs”, Clusius came to Leiden. A few months later, in the spring of 1594, the new garden of Clusius was the site of the very first tulip to bloom in the Netherlands.


Rise of the tulip trade

In 1625, one bulb of a rare variety of tulip could already cost 2,000 florins. (florin - a gold coin weighing about 3.5 grams). Their trading was organized on the exchanges of Amsterdam, Rotterdam, Haarlem and Leiden.

By 1635 the price had reached 5,500 florins. By the beginning of 1637, the average price of tulips had risen 25 times.

According to art historian Oliver Impey, it was cheaper to buy a painting of a tulip by Jan D. de Heem (the great Dutch still life painter of the 17th century) than a rare tulip bulb.

One bulb was given as a dowry to a bride, three were worth as much as a good house, and just one bulb of the Tulip Brasserie variety was given for a thriving brewery. Bulb sellers made huge profits. All conversations and transactions revolved around a single subject - onions.



The ever-increasing prices encouraged many families from the middle and poor strata of society to play on the exchange for the sale of tulips. Houses, fortunes, and businesses were mortgaged to buy bulbs and resell them at a higher price. Sales and resales were made many times, while the bulbs were not even taken out of the ground. States doubled in moments. The poor became rich, the rich became super-rich. Bulb trading on the stock exchange has become an uncontrolled market.

For transactions, futures contracts were often used. (buyers paid money for the supply of bulbs in the future), which received the figurative name "wind trade".

According to Bernstein, options were also used for transactions (the buyer was given the right to buy or sell the bulbs at a predetermined price in the future). It was the use of options that was one of the reasons for the formation of a "soap bubble" and its decline. Options seem to have given many newcomers the opportunity to enter a trade that was previously closed to them.

According to Charles McKay, at one point 12 acres of land were offered for the Semper Augustus tulip.

The collapse in prices for tulips

In February 1637, the number of sellers exceeded the number of buyers and there was an unexpected drop in prices - no more than 300 florins were given for the most expensive bulbs. started; in just one night, thousands of Dutch were ruined. By the end of the year, prices fell by an average of 100 times. It was the collapse of an entire branch of commerce. McKay argued that after the end of the tulip mania, the Dutch economy was in crisis, which is disputed by some modern scholars. Tulip mania also affected other European countries, but not to the same extent as Holland. For example, in 1800, a tulip bulb in England cost 15 guineas - a fairly substantial amount for those times.

The passion for tulips survived the effects of tulip mania and the tulip bulb industry flourished again. Indeed, by the end of the 18th century, Dutch tulips had become so famous that the Turkish Sultan Ahmed III imported thousands of tulips from Holland. So after a long journey, the Dutch descendant of Turkish tulips returned to their "roots".
Tulip mania is still insufficiently studied and has not been the subject of careful scientific analysis. For the first time, the phenomenon of tulip mania became widely known in 1841 after the publication of the book "The Most Common Misconceptions and Madness of the Crowd" written by the English journalist Charles Mackay, and the 1850 novel The Black Tulip by Alexandre Dumas.

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tulip mania(dutch. tulpenmanie) - a turbulent period in the history of Holland, when the demand for tulip bulbs began to exceed supply, and this product reached an incredible price (this is especially true for the years 1634-1637).

Usually, little is written about this crisis of almost 400 years ago, but the story of the Dutch tulips deserves more attention, especially since it is associated with "unreal money". By the way, when reading about the tulip crisis, the question often arises, why did the tulip mania cover only Holland, and not other European countries?

From Turkey to Austria

In 1555-1562, the Austrian envoy Ogier Ghiselin de Busbecq could be found in the Ottoman Empire. It was he who brought several tulip bulbs to Europe. Tulip bulbs that arrived from Constantinople to Vienna were planted in the garden of the Austrian emperor of the Habsburg dynasty, Ferdinand I. Charles de l'Ecluse, the famous French botanist of that time, usually introduced by the name of Carolus Clusius, looked after them. Charles de l'Ecluse succeeded in creating the necessary climate for flowers and the tulips in the Habsburg garden bloomed. Rumors of Ecluse's success reached the leadership of the University of Leiden, who offered him to become the curator of the university botanical garden.

From Austria to Holland

In the autumn of 1593, Charles de l'Ecluse arrived in the Dutch city of Leiden with a secret cargo of tulip bulbs. And already in 1594 the first tulip planted by him in Holland blossomed. In Leiden, Écluse crossed different types tulips, trying to develop tulips that could be grown in a harsher climate than Turkey and get petals of different shades. For more than twenty years, Charles de l'Ecluse worked in the botanical garden of Leiden, but one day the tulips he had grown were stolen. Soon, some unknown disease attacked the flowers (it is believed that it was a virus) - tulip buds took on unprecedented forms, the edges of some petals became as if sheared, new shades appeared. It was this anomaly that served as the beginning of tulip mania in Holland. Just do not think that at that time the whole of Holland was blooming with tulips. These flowers were a symbol of luxury and their presence in the Dutch garden testified to the high status of the owners in society.

Incredible numbers

Why were tulips so important? The fact is that every rich man of that time had plenty of real estate and horses with carriages, but the tulip was just such a rare and exceptional thing that could always tell about the wealth of the owner. In 1623, one bulb of the most popular varieties of tulips stalled 1000 guilders. Is it a lot or a little? Decide for yourself - the annual income of the average Dutchman of that time was 150 guilders, which means that he had to save almost seven years to buy one tulip. There are known facts when tulips were exchanged for real estate and land. Tulip sellers of that time earned about 6,000 guilders a month. Some transactions are generally striking, for example, in 1635, 40 tulip bulbs were sold for 100,000 guilders. What a huge amount of money this can be understood by learning the prices for food of that time: one ton of butter stall 100 guilders, 10 fattened pigs - 300 guilders. The bulbs of the Semper Augustus variety were considered the most expensive - a deal is known for the sale of one bulb of this variety at a price of 6,000 guilders.

Tulip exchanges

The demand for tulips was increasing, and the supply was not sufficient. Many Dutch have immersed themselves in the tulip business. Tulip exchanges have opened in Amsterdam, Rotterdam, Harlem and Leiden. Not only “live” tulip bulbs were traded on the stock exchanges, but also those that had not yet grown. Deals for the future were also concluded there, where people were obliged to buy or sell a specified number of tulip bulbs for a specified amount at a specified time in the future (in modern terms, the use of options). It was the use of options that was one of the reasons for the formation of a "soap bubble" and its decline. Options seem to have given many newcomers the opportunity to enter a market that was previously closed to them. In such transactions, not only the ungrown “children” of already planted bulbs were sold, but also bulbs that had yet to be planted next autumn. These transactions were called "wind trade" (eng. " wind handel"). In a word, real exchange life was in full swing, in which speculation was not in shares, but in tulips. Many Dutch people, driven by tulip mania, sold their only possessions only to buy a couple of tulip bulbs and later sell them for a higher price.

tulip mania bubble

Prices for tulip bulbs have been rising every year. But in 1637, the market overheated - prices reached such heights that demand fell sharply. The indebted and impoverished Dutch had a lot of tulip bulbs left - but there was no one to sell them. In that year, the price of bulbs fell 100 times. This collapse in prices also hit the entire Dutch tulip industry. The tulip crisis was the cause of the subsequent financial crisis in Holland, it turned out that the entire economy of the country was focused on tulips. Affected citizens began to blame the provoking tulip crisis on the government, which adopted a series of amendments to the laws on the trade in tulips, limiting stock speculation. It is clear that the Dutch government only "closed the hole" that allowed tulip prices to skyrocket. Not everyone understood that the sooner the bubble of tulip mania burst, the easier the consequences would be.

Background and the beginning of the boom

One of the foreigners intrigued by tulips was Ohhir Gilen de Bouzbek, the Austrian ambassador to Turkey (1555-1562). He brought some bulbs from Constantinople to Vienna, where they were planted in the gardens of Ferdinand I, the Habsburg emperor. There the tulips blossomed under the expert supervision of Charles de Lecluse, a French botanist better known by his Latin name Carl Clusius.

Soon the fame of Clusius attracted the attention of the University of Leiden in the Netherlands, and he was persuaded to become curator of the university botanical garden. In October 1593, with "a secret supply of tulip bulbs", Clusius came to Leiden. A few months later, in the spring of 1594, the new garden of Clusius was the site of the very first tulip to bloom in the Netherlands.

For more than 20 years, the Dutch have managed to grow dozens of varieties of tulips.

Rise of trade

Price collapse

Notes

Links


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See what "Tulipmania" is in other dictionaries:

    - (from tulip and Greek mania passion). Excessive love for tulips, which in the XVII century. developed to the point in Holland that an onion was paid 13,000 guilders, until finally a law was passed against this kind of extravagance. Dictionary… … Dictionary of foreign words of the Russian language

    See Tulip...

    Finance Public Finance: International Finance The state budget local budget Private finance: Corporate finance Household finance Financial markets: Money market Currency market Stock market Derivatives Market Financial Instruments ... Wikipedia

    - (theory). T. is understood as fishing activity aimed at overcoming obstacles that separate producers and consumers in time and space. This definition (van der Borgt) is wider than the generally accepted one, according to which T. is in ... ... Encyclopedic Dictionary F.A. Brockhaus and I.A. Efron

    - (Tulipa), a genus of perennial herbs of this family. lily. Stem high 6 50 cm, with 2 3 (5) leaves and 1 (rarely several) bright flower. Propagated by seeds. OK. 100 species, in the temperate zone of Eurasia (main sample in Central Asia). In the USSR ca. 80 species, in Wed. Asia, ... ... Biological encyclopedic dictionary

    This article lacks links to sources of information. Information must be verifiable, otherwise it may be questioned and removed. You can ... Wikipedia

When economists are faced with the phenomena of financial panic or financial collapse, they immediately think of such a phenomenon as tulip mania. In fact, the concept of "tulip mania" is a metaphor used in the field of economics. Looking into Palgrave's Dictionary of Economic Terms, there is no mention of the speculative mania of the seventeenth century in Holland. Instead, the economist Guillermo Calvo, in his Dictionary Supplement, defines tulip mania as follows: Tulip mania is a phenomenon in which price behavior cannot be fully explained by economic fundamentals.

The purpose of this work is to identify the features of the emergence of the first financial crisis in Europe and its consequences.

Many researchers agree that events occur in a certain cycle and that they can be repeated from time to time. In this regard, we can say that the study of the historical facts of financial crises gives us the opportunity to avoid the mistakes of past generations.

According to Karl Marx, Holland at the beginning of the 17th century could be considered an ideal capitalist country. Almost immediately, foreign and colonial trade became the basis of its economic base. The Dutch industry also received a strong impetus at this time. The key to success is considered to be the political system of the Netherlands, which guaranteed the big bourgeoisie, which seized all the finances and trade in the country, unlimited domination.

The “Tulip” epic rightfully bears the title of the very first speculative race in the world, which ended in failure for the whole country, which at that time was the leader in economic terms. The excitement and crazy demand for tulips began in the Netherlands in the early 1620s and did not stop until the 37th year. The peak of prices was recorded in a three-year period: from 1634 to 1637.

One of the foreigners intrigued by tulips was Ogier Ghislain de Busbeck, the Austrian ambassador to Turkey (1555-1562). He brought some bulbs from Constantinople to Vienna, where they were planted in the gardens of Ferdinand I, the Habsburg emperor. There the tulips blossomed under the expert supervision of Charles de Lecluse, a French botanist better known by his Latin name Carl Clusius.

The tulip was a status symbol. He testified to belonging to the upper strata of society. Beautiful flowers of one color or another grew from the bulbs, and after a few years it suddenly changed: stripes appeared on the petals, each time of different shades. It was only in 1928 that it was established that the discoloration of the flower is a disease of a viral nature (mosaic), which, in the end, leads to the degeneration of the variety. But at the end of the 17th century, it seemed like a miracle, the petals received an unusual and brighter color. These flowers were a symbol of luxury and their presence in the Dutch garden testified to the high status of the owners in society.

The reason for the frenzied demand for tulip bulbs can be considered the publication in 1612 in the Dutch catalog Florilegium of almost 100 varieties of this flower. Over time, some European royal courts became interested in this new symbol of prosperity. As a result, a sharp increase in the price of it began. Realizing that you can make good money on tulips, almost all segments of the population began to engage in this business. The fever was explained by the expectation that soon more and more people would become interested in this flower, and the prices for it would increase more than once.

Foreign capital begins to rapidly import into Holland, the value of real estate grows, and the demand for luxury goods increases. People who had not previously thought about trade began to take an active interest in it and even mortgaged their houses, lands, and jewelry to buy as many tulip bulbs as possible in the hope of earning as much money as possible later.

Before this "flower" fever began, tulips were traded from May, when they were dug up, until October, when they had to be planted in the ground. The following spring, the flowers were already delighting their owners. During the boom, the winter trade in seedlings became widespread. Most merchants, despite all the risk, tried to buy tulips in winter: in this case, in the spring they could be sold at two or even three times the price! By the end of 1636, the lion's share of the annual crop turned into "paper", sold under "future" contracts. As a result, speculators began to appear on the markets, trying to buy as many "paper" tulips as possible at the beginning of summer, hoping to resell them next spring at an even higher price.

Prices for tulip bulbs have been on the rise. But on February 2, 1637, the market overheated - prices reached such heights that demand fell sharply. The indebted and impoverished Dutch had a lot of tulip bulbs left - but there was no one to sell them. Of course, those who were lucky enough to be the first to sell the bulbs became rich in no time. Those who were not so lucky lost everything. In that year, the price of bulbs fell 100 times. This collapse in prices also hit the entire Dutch tulip industry. The tulip crisis was the cause of the subsequent financial crisis in Holland, it turned out that the entire economy of the country was focused on tulips. Affected citizens began to blame the provoking tulip crisis on the government, which adopted a series of amendments to the laws on the trade in tulips, limiting stock speculation. It is clear that the Dutch government only "closed the hole" that allowed tulip prices to skyrocket. Not everyone understood that the sooner the bubble of tulip mania burst, the easier the consequences would be.

The main dealers were desperately trying to save the day by organizing mock auctions. Buyers began to break contracts for flowers summer season 1637, and on February 24 the main growers of tulips gathered in Amsterdam for an emergency meeting. The developed scenario for overcoming the crisis was as follows: contracts concluded before November 1636 were proposed to be considered valid, and buyers could terminate subsequent transactions in unilaterally by paying 10% compensation. But Supreme Court The Netherlands, which considered manufacturers to be the main culprits in the mass ruin of Dutch citizens, vetoed this decision and proposed its own version. Sellers, desperate to get money from their buyers, received the right to sell the goods to a third party for any price, and then claim the lost difference from the one with whom the original agreement was concluded. But no one wanted to buy anymore….. The government understood that one certain category of its citizens could not be blamed for this hysteria. Everyone was to blame. Special commissions were sent around the country to sort out disputes over "tulip" deals. As a result, most of the sellers agreed to receive 5 florins out of every 100 that were due to them under the contracts.

A three-year stagnation in the "non-tulip" areas of the Dutch economy: shipbuilding, agriculture, fishing - cost the country dearly. The scale of the shock that the Netherlands suffered in the 17th century is commensurate with the default of August 1998. Subsequent wars brought the country to a desperate state, hastening the decline of Dutch trading power.

The passion for tulips survived the effects of tulip mania and the tulip bulb industry flourished again. Indeed, by the 18th century, Dutch tulips had become so famous that the Turkish Sultan Ahmed III imported thousands of tulips from Holland. So after a long journey, the Dutch descendant of Turkish tulips returned to their "roots".

Tulip mania is still insufficiently studied and has not been the subject of careful scientific analysis. For the first time, the phenomenon of tulip mania became widely known in 1841 after the publication of the book The Most Common Delusions and Folly of the Crowd, written by the English journalist Charles Mackay, and the novel The Black Tulip by Alexandre Dumas (1850).

In its development, the economy goes through stages of ups and downs, determined by the general laws of its development. Therefore, development economic system viewed as a cyclical process. The Tulip Crisis, in turn, is an important step in this cyclical process. The paper reveals the features of the emergence of the first financial crisis in Europe, and it can be concluded that everything in life returns, and everything that seems new, in fact, has already happened.

You need to know what history and experience around the world says, and use this knowledge for the benefit of the prosperity of the country's financial life.

Literature:

1. McKay C. The most common misconceptions and madness of the crowd / M .: Alpina Business Books, 1998. – 318s

2. Bernstein P. L. Against the gods: The taming of risk / Per. from English. - M.: CJSC "Olimp-Business", 2000. - 400 s

3. Douglas French "The Truth About Tulip Mania" [article], 2007 Available at: http://mises.org/

Perkov G.A.

Kramarenko A.A.

Donetsk National University