In 1636 while Germany was ravaged by the Thirty Years War, the Dutch Netherlands were relatively untouched as they continued their on and off fight for complete independence from the Spanish Empire. In 1636 the Dutch were beginning their Golden Age. The Merchant Republic of the United Provinces of the Netherlands had a far flung trading empire with colonies and trading posts in the Americas, Africa, Ceylon, India, the South Pacific, and Japan. The Netherlands was easily as powerful as its much larger neighbors, Great Britain and France. As the Dutch slowly asserted their own foreign policy, they sent ambassadors around the world; one of them returned from the Ottoman Empire with bulbs from a plant hitherto unseen in the Provinces – the tulip.
The bright flowers took to the Dutch soil like peanut butter to jelly, or corruption to politics. With war with Spain winding down, economic resources poured into commerce, and Dutch cities became unimaginably wealthy. Grand city houses were used by the newly rich merchants to display their wealth, and the tulips gracing the small yards and windowsills became the centerpieces of their new status. The more exotic and multicolored the tulip, the higher the price, and thus the greater status accorded to its owners, the only exception being any dark violet bulb close enough to the elusive and coveted Holy Grail of the Netherlands – The Black Tulip. The trade in tulip bulbs had occurred for decades, but only during the months from April (when they bloomed) to October (when they had to be replanted). On 12 November 1636, the Dutch created the first formal futures market for the soon-to-be symbol of the country. Buying and selling of the next season’s tulip bulbs began five months earlier than normal, and without the bulbs actually trading hands.
The Dutch merchants went insane for the new bulb contracts. In taverns and salons across the Provinces, tulip contracts changed hands at a frenzied pace. Speculative buying pushed the prices higher and higher. The entire population dabbled in the tulip market as a quick way to get rich. Within a month, tulip bulb “exports” became the fourth most profitable product in the country without a single bulb actually leaving the ground. Some bulbs went for as much as 3000 guilders, at a time when a skilled craftsman made 300 guilders a year.
Just three months later on 3 February 1637, one of only two Semper Augustus bulbs in existence was used to purchase 12 acres of land. With a fixed supply, the bulbs had gotten extraordinarily expensive. Very soon, the prices for the bulbs had gotten so high that buyers became scarce, then nonexistent. The Tulip Market crashed and the speculative bubble burst. Fortunes were made, but debts more so. France threatened to invade to collect.
By the April tulip bloom in 1637, the prices were back to what they were on 12 November. Tulipmania had run its course, and nearly destroyed the new country.