In 1637 the Dutch briefly priced one tulip bulb above an Amsterdam canal house

In 1630s Holland, tulips — recently arrived, exotic, and slow to propagate — became a status good, and then a financial instrument. Because bulbs spend most of the year underground, trading shifted to promissory notes: contracts for future bulbs, bought and sold in tavern 'colleges', often by people who had never grown a tulip and never intended to. Prices for prized broken-petal varieties like Semper Augustus reached levels contemporaries compared to the cost of a fine canal house.

In the first week of February 1637, at a routine auction in Haarlem, the bids simply didn't come. Word spread through a market that was, in the end, a few thousand people who all knew each other, and within days contracts were unsellable at any price. Courts largely declined to enforce the paper, so the mania resolved as it had inflated: informally, in taverns, with settlements of a few percent on the guilder.

Modern historians, led by Anne Goldgar, have deflated the legend — the economy did not collapse, and documented ruin was rare. But that revision sharpens the real lesson rather than killing it: the bubble ran not on ignorance but on the entirely reasonable belief that someone else would pay more tomorrow. Every bubble since has been staffed by people who knew about tulips.