Famous First Bubbles

Claims Supported by This Source

1. The standard narrative of Tulip Mania was copied by Mackay (1852) from Beckmann (1846), and its source traces back to three anonymous dialogue pamphlets (published by the anti-speculation side) that appeared in 1637, immediately after the crash (p. 37, note 3).
2. A Semper Augustus bulb sold for 2,000 guilders in 1625 (p. 37). The peak was February 5, 1637. Table 2: English Admiral 700→210, Admirael van Eyck 1,345→220, General Rotgans 805→138 guilders (1637-02-05 → 1642/43).
3. The average annual rate of decline from February 1637 to 1642 was 32%, and the average annual rate of decline for high-end bulbs in the 18th century was 28.5% (Table 1). The contribution of the crash itself was at most a 16% decline, not as severe as the legend suggests (p. 38).
4. Speculation in common varieties, in a futures market born in taverns in November 1636, saw prices rise up to 25-fold by January 1637. A Switser was 0.17 guilders/aas on February 5; 0.11 in notarized contracts on February 6 and 9 (1 aas = 1/20 g); and 0.035 on January 23 (p. 39).
5. No evidence of severe economic hardship due to Tulip Mania; contemporary histories treat this period as a Golden Age (p. 39).
6. Law's System: Banque Générale in June 1716, Compagnie d'Occident in August 1717, Banque Royale in January 1719. Share price from 500 livres to 1,800 (July 1719), 3,000 (October 1719), 10,000 (end of October 1719). Pegged at 9,000 on March 5, 1720; deflationary measures on May 21, 1720. Price index (Hamilton 1936) from 116.1 (July 1719) → 203.7 (September 1720) → 164.2 (December 1720). Banknotes reached a maximum of 2.7 billion livres, 1.2 billion in October 1720 (pp. 42–46).
7. South Sea Company shares from c. 120 pounds in January 1720 to c. 775 at the end of August, and c. 290 on October 1. The Bubble Act was passed in June and enforced on August 18 (pp. 49–51).
8. Author's position: All three events can be explained by market fundamentals and should not be called "bubbles" (pp. 36–37, 52–53).

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