Tulipomania from Memoirs of Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay
Tulipomania from Memoirs of Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay
I’ll be reading the chapter Tulipomania from Memoirs of Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay every weekday morning at 7:45am HST / 1:45pm EST live on this blog.
pp. 85 – 87 A history of the tulip brought from Constantine to Holland and Germany from 1559 to the 1634. It became the rage in Holland with 1 person paying half his fortune from one bulb.
pp. 88 – 90 Tulips went up in price and exchanges and notaries were set up just to trade in tulips. One sailor was jailed for thinking the tulip bulb was an onion and a botanist was also jailed for dissecting one. Then, the rich stopped buying them and started selling, and the whole tulip frenzy ended. Those who were rich from speculating were poor again, and those with wealth hid it from their neighbors by investing it in England or other funds.
p. 91 The government does not intervene in the price collapse of tulips. There are contracts outstanding where the tulip vendor has the tulip but the purchaser refuses to pay the price promises, as it has plummeted from thousands to just hundreds of dollars. Contracts are not enforced by the government, as they are considered to be gambling. The economy recovers slowly over the next few years.
Some tried to start a tulipomania in England and in France, but it never was like the one in Holland. Even today, the country pays the highest prices for tulips.
