Nobody Drowned in a Canal Over Tulips

On February 3, 1637, a routine bulb auction in Haarlem opened with a buyer who didn't show. Word spread. Within days the futures market for tulip bulbs in the Netherlands had collapsed and the trade ground to a halt. That part is real.

The rest of the story — chambermaids speculating their savings into ruin, ruined merchants drowning themselves in canals, the entire Dutch economy lurching to a stop — comes mostly from Charles Mackay's 1841 book Extraordinary Popular Delusions and the Madness of Crowds. Mackay drew on Dutch satirical pamphlets that were, in their own time, jokes about a few showy speculators.

The historian Anne Goldgar went through Amsterdam's notarial archives looking for the wreckage. She found about 37 people who had paid more than 300 guilders for a single bulb — roughly a craftsman's annual wage. She found no canal suicides. She found no bankruptcy that could be cleanly attributed to a tulip loss. The buyers were, by and large, exactly the people you'd expect to be speculating in a luxury good: prosperous merchants and skilled artisans who could afford the gamble.

There was also no actual exchange of tulips in the crash. The bulbs were in the ground until May or June; the contracts that crashed in February were paper. Most parties simply walked away or settled at a fraction of the agreed price. The losses were notional, the panic was local, and the morality tale was added later by a Scottish journalist who needed a vivid opening chapter.