Tulips were the cause of the first major financial bubble in human history
After having been brought to the Netherlands in 1593 by Carolus Clusius, the prefect of the Botanical Garden of the University of Leiden, tulips started spreading in the Netherlands and gaining popularity. They were extremely praised and coveted, as an exclusive rarity and a luxury item to possess, and started being sought after and traded at very high prices, which brought about a phenomenon known as Tulip mania – the first major financial bubble in the world.
Sales contracts were usually concluded for bulbs which were planted and the contracts were to be honoured in summer, when the bulbs could be lifted from the ground. But most of the buyers never got to see the bulbs they traded, because the same bulbs could be resold up to 10 times a day, their buyers not being interested in buying the bulbs themselves, but in immediately reselling the bulbs they acquired at a higher price. The market rocketed during the winter of 1636-1637, when single tulip bulbs sold for as much as 10 times the annual income of a skilled crafts worker. The collapse happened in February 1637, when buyers refused for the first time to show up at a bulb auction and the trade in tulip bulbs stopped abruptly.
Many people lost their fortunes overnight. But, luckily, tulips did not loose their popularity among connoisseurs and the trade in bulbs continued, even though at a slower pace and at much lower prices. This made the survival of tulips possible and allowed them to live on to modern times and continue playing a significant role in the Dutch economy.