Table of Contents
When the Tulip Bubble Burst
Passage
Tulips are spring-blooming perennials that grow from bulbs. Depending on the species, tulip plants can grow as short as 4 inches (10 cm) or as high as 28 inches (71 cm). The tulip’s large flowers usually bloom on scapes or sub-scapose stems that lack bracts. Most tulips produce only one flower per stem, but a few species bear multiple flowers on their scapes (e.g. Tulipa turkestanica). The showy, generally cup or star-shaped tulip flower has three petals and three sepals, which are often termed tepals because they are nearly identical. These six tepals are often marked on the interior surface near the bases with darker colorings. Tulip flowers come in a wide variety of colors, except pure blue (several tulips with “blue” in the name have a faint violet hue)
A. Long before anyone ever heard of Qualcomm, CMGI, Cisco Systems, or the other high-tech stocks that have soared during the current bull market, there was Semper Augustus. Both more prosaic and more sublime than any stock or bond, it was a tulip of extraordinary beauty, its midnight-blue petals topped by a band of pure white and accented with crimson flares. To denizens of 17th century Holland, little was as desirable.
B. Around 1624, the Amsterdam man who owned the only dozen specimens was offered 3,000 guilders for one bulb. While there’s no accurate way to render that in today’s greenbacks, the sum was roughly equal to the annual income of a wealthy merchant. (A few years later, Rembrandt received about half that amount for painting The Night Watch.) Yet the bulb’s owner, whose name is now lost to history, nixed the offer.
C. Who was crazier, the tulip lover who refused to sell for a small fortune or the one who was willing to splurge. That’s a question that springs to mind after reading Tulip mania: The Story of the World’s Most Coveted Flower and the Extraordinary Passions It Aroused by British journalist Mike Dash. In recent years, as investors have intentionally forgotten everything they learned in Investing 101 in order to load up on unproved, unprofitable dot- com issues, tulip mania has been invoked frequently. In this concise, artfully written account, Dash tells the real history behind the buzzword and in doing so, offers a cautionary tale for our times.
D. The Dutch were not the first to go gaga over the tulip. Long before the first tulip bloomed in Europe-in Bavaria, it turns out, in 1559-the flower had enchanted the Persians and bewitched the rulers of the Ottoman Empire. It was in Holland, however, that the passion for tulips found its most fertile ground, for reasons that had little to do with horticulture.
E. Holland in the early 17th century was embarking on its Golden Age. Resources that had just a few years earlier gone toward fighting for independence from Spain now flowed into commerce. Amsterdam merchants were at the center of the lucrative East Indies trade, where a single voyage could yield profits of 400%. They displayed their success by erecting grand estates surrounded by flower gardens. The Dutch population seemed tom by two contradictory impulses: a horror of living beyond one’s means and the love of a long shot.
F. Enter the tulip. “It is impossible to comprehend the tulip mania without understanding just how different tulips were from every other flower known to horticulturists in the 17th century,” says Dash. “The colors they exhibited were more intense and more concentrated than those of ordinary plants.” Despite the outlandish prices commanded by rare bulbs, ordinary tulips were sold by the pound. Around 1630, however, a new type of tulip fancier appeared, lured by tales of fat profits. These “florists,” or professional tulip traders, sought out flower lovers and speculators alike. But if the supply of tulip buyers grew quickly, the supply of bulbs did not. The tulip was a conspirator in the supply squeeze: It takes seven years to grow one from seed. And while bulbs can produce two or three clones, or “offsets,” annually, the mother bulb only lasts a few years.
G. Bulb prices rose steadily throughout the 1630s, as ever more speculators into the market. Weavers and farmers mortgaged whatever they could to raise cash to begin trading. In 1633, a farmhouse in Hoorn changed hands for three rare bulbs. By 1636 any tulip-even bulbs recently considered garbage-could be sold off, often for hundreds of guilders. A futures market for bulbs existed, and tulip traders could be found conducting their business in hundreds of Dutch taverns. Tulip mania reached its peak during the winter of 1636-37, when some bulbs were changing hands ten times in a day. The zenith came early that winter, at an auction to benefit seven orphans whose only asset was 70 fine tulips left by then father. One, a rare Violetten Admirael van Enkhuizen bulb that was about to split in two, sold for 5,200 guilders, the all-time record. All told, the flowers brought in nearly 53,000 guilders.
H. Soon after, the tulip market crashed utterly, spectacularly. It began in Haarlem, at a routine bulb auction when, for the first time, the greater fool refused to show up and pay. Within days, the panic had spread across the country. Despite the efforts of traders to prop up demand, the market for tulips evaporated. Flowers that had commanded 5,000 guilders a few weeks before now fetched one-hundredth that amount. Tulip mania is not without flaws. Dash dwells too long on the tulip’s migration from Asia to Holland. But he does a service with this illuminating, accessible account of incredible financial folly.
I. Tulip mania differed in one crucial aspect from the dot-com craze that grips our attention today: Even at its height, the Amsterdam Stock Exchange, well- established in 1630, wouldn’t touch tulips. “The speculation in tulip bulbs always existed at the margins of Dutch economic life,” Dash writes. After the market crashed, a compromise was brokered that let most traders settle then debts for a fraction of then liability. The overall fallout on the Dutch economy was negligible. Will we say the same when Wall Street’s current obsession finally runs its course?
Questions
Questions 14-18
The reading Passage has seven paragraphs A-I.
Which paragraph contains the following information?
Write the correct letter A-I, in boxes 14-18 on your answer sheet.
14. Difference between bubble burst impacts by tulip and by high-tech shares
15. Spread of tulip before 17th century
16. Indication of money offered for rare bulb in 17th century
17. Tulip was treated as money in Holland
18. Comparison made between tulip and other plants
Questions 19-23
Do the following statements agree with the information given in Reading Passage 2? In boxes 19-23 on your answer sheet, write
TRUE if the statement is true
FALSE if the statement is false
NOT GIVEN if the information is not given in the passage 2
19. In 1624, all the tulip collection belonged to a man in Amsterdam.
20. Tulip was first planted in Holland according to this passage.
21. Popularity of Tulip in Holland was much higher than any other countries in 17th century.
22. Holland was the most wealthy country in the world in 17th century.
23. From 1630, Amsterdam Stock Exchange started to regulate Tulips exchange market.
Questions 24-27
Summary
Complete the following summary of the paragraphs of Reading Passage, using no more than two words from the Reading Passage for each answer.
Write your answers in boxes 24-27 on your answer sheet.
Dutch concentrated on gaining independence by ____24____ against Spain in the early 17th century; consequently spare resources entered the area of _____25_____. Prosperous traders demonstrated their status by building great _____26____ and with gardens in surroundings. Attracted by the success of profit on tulip, traders kept looking for______27_____and speculator for sale.
Answers
Below are the answers, key words, synonyms and full explanations for the IELTS Reading passage When the Tulip Bubble Burst (Passage 2, Questions 14–27).
Questions 14–18: Which paragraph contains the following information? (A–I)
14. Difference between bubble-burst impacts by tulip and by high-tech shares.
Answer: I
Key words: Tulip mania differed in one crucial aspect from the dot-com craze … The overall fallout on the Dutch economy was negligible
Synonyms: difference between tulip and high-tech crashes = tulip mania differed from the dot-com craze; its fallout was negligible = “Tulip mania differed in one crucial aspect from the dot-com craze that grips our attention today”
Explanation: Paragraph I contrasts the tulip crash with the modern dot-com/high-tech bubble → I.
15. Spread of tulip before 17th century.
Answer: D
Key words: Long before the first tulip bloomed in Europe … the flower had enchanted the Persians and bewitched the rulers of the Ottoman Empire
Synonyms: spread before the 17th century = it reached the Persians and Ottomans before blooming in Europe = “Long before the first tulip bloomed in Europe-in Bavaria … in 1559-the flower had enchanted the Persians and bewitched the rulers of the Ottoman Empire”
Explanation: Paragraph D traces the tulip’s early spread before the 1600s → D.
16. Indication of money offered for a rare bulb in the 17th century.
Answer: B
Key words: the Amsterdam man who owned the only dozen specimens was offered 3,000 guilders for one bulb
Synonyms: money offered for a rare bulb = an offer of 3,000 guilders for one bulb = “Around 1624, the Amsterdam man … was offered 3,000 guilders for one bulb”
Explanation: Paragraph B gives the sum offered for a single bulb → B.
17. Tulip was treated as money in Holland.
Answer: G
Key words: a farmhouse in Hoorn changed hands for three rare bulbs … A futures market for bulbs existed
Synonyms: treated as money = property bought with bulbs and a futures market for them = “In 1633, a farmhouse in Hoorn changed hands for three rare bulbs … A futures market for bulbs existed”
Explanation: Paragraph G shows bulbs used like currency → G.
18. Comparison made between tulip and other plants.
Answer: F
Key words: just how different tulips were from every other flower … The colors they exhibited were more intense and more concentrated than those of ordinary plants
Synonyms: comparison with other plants = how different tulips were, with more intense colours than ordinary plants = “The colors they exhibited were more intense and more concentrated than those of ordinary plants”
Explanation: Paragraph F compares tulips with ordinary plants → F.
Questions 19–23: True / False / Not Given
19. In 1624, all the tulip collection belonged to a man in Amsterdam.
Answer: TRUE
Key words: the Amsterdam man who owned the only dozen specimens
Synonyms: all the collection belonged to one man = he owned the only dozen specimens = “Around 1624, the Amsterdam man who owned the only dozen specimens was offered 3,000 guilders”
Explanation: One Amsterdam man owned the only specimens → TRUE.
20. Tulip was first planted in Holland according to this passage.
Answer: FALSE
Key words: Long before the first tulip bloomed in Europe-in Bavaria … the flower had enchanted the Persians
Synonyms: first planted in Holland (contradicted) = it first bloomed in Bavaria and was known earlier to the Persians/Ottomans = “the first tulip bloomed in Europe-in Bavaria, it turns out, in 1559”
Explanation: The tulip did not originate in Holland → FALSE.
21. Popularity of Tulip in Holland was much higher than any other countries in the 17th century.
Answer: TRUE
Key words: It was in Holland, however, that the passion for tulips found its most fertile ground
Synonyms: more popular than anywhere = the passion found its most fertile ground in Holland = “It was in Holland, however, that the passion for tulips found its most fertile ground”
Explanation: Holland loved tulips more than anywhere else → TRUE.
22. Holland was the most wealthy country in the world in the 17th century.
Answer: NOT GIVEN
Key words: Holland in the early 17th century was embarking on its Golden Age
Synonyms: most wealthy in the world = the passage says Holland was prosperous (Golden Age) but never ranks it the wealthiest = “Holland in the early 17th century was embarking on its Golden Age”
Explanation: Its wealth is mentioned, but not that it was the world’s wealthiest → NOT GIVEN.
23. From 1630, Amsterdam Stock Exchange started to regulate the Tulip exchange market.
Answer: FALSE
Key words: Even at its height, the Amsterdam Stock Exchange, well-established in 1630, wouldn’t touch tulips
Synonyms: the Stock Exchange regulated tulips (contradicted) = it wouldn’t touch tulips = “Even at its height, the Amsterdam Stock Exchange, well-established in 1630, wouldn’t touch tulips”
Explanation: The Exchange refused to deal in tulips, let alone regulate them → FALSE.
Questions 24–27: Summary Completion (NO MORE THAN TWO WORDS)
24. Dutch concentrated on gaining independence by ______ against Spain
Answer: fighting
Key words: Resources that had just a few years earlier gone toward fighting for independence from Spain
Synonyms: gaining independence by ______ against Spain = fighting for independence from Spain = “Resources that had just a few years earlier gone toward fighting for independence from Spain”
Explanation: They fought for independence from Spain → fighting.
25. spare resources entered the area of ______
Answer: commerce
Key words: Resources … now flowed into commerce
Synonyms: resources entered the area of ______ = resources flowed into commerce = “Resources that had just a few years earlier gone toward fighting … now flowed into commerce”
Explanation: Freed-up resources went into commerce → commerce.
26. Prosperous traders demonstrated their status by building great ______
Answer: estates
Key words: They displayed their success by erecting grand estates surrounded by flower gardens
Synonyms: building great ______ with gardens = erecting grand estates surrounded by flower gardens = “They displayed their success by erecting grand estates surrounded by flower gardens”
Explanation: Rich merchants built grand estates → estates.
27. traders kept looking for ______ and speculator for sale
Answer: flower lovers
Key words: These “florists,” or professional tulip traders, sought out flower lovers and speculators alike
Synonyms: looking for ______ and speculators = sought out flower lovers and speculators = “These ‘florists,’ or professional tulip traders, sought out flower lovers and speculators alike”
Explanation: Traders looked for flower lovers (and speculators) to sell to → flower lovers.
Answer Key (Quick Reference)
| Q | Answer | Q | Answer |
|---|---|---|---|
| 14 | I | 21 | TRUE |
| 15 | D | 22 | NOT GIVEN |
| 16 | B | 23 | FALSE |
| 17 | G | 24 | fighting |
| 18 | F | 25 | commerce |
| 19 | TRUE | 26 | estates |
| 20 | FALSE | 27 | flower lovers |
