Buttonwood Agreement 1792

We, the subscribers, brokers for the purchase and sale of the public stock, solemnly promise by this and we promise each other that we will not buy or sell from this day on for any person, any type of public shares, at less than a quarter of a percent commission on specie value and that we will mutually give each other preference in our negotiations. In testimony, from where we put our hands this May 17 in New York, 1792. [4] On May 17, 1792, the Buttonwood Agreement was signed by 24 brokers. The signing took place outside 68 Wall Street in Lower Manhattan, New York, under a button tree. The meeting was to negotiate the terms and rules of the speculative market. – May 17, 1792 Buttonwood Agreement – Original Articles of Agreement creation of the New York Stock and Exchange Board The Economist, a London-based weekly, named its column on financial markets under the agreement. Early trade took place in cafes and taverns (as well as on the street in good weather), but brokers also began holding auctions in their offices. In early 1792, John Sutton and his partner Benjamin Jay and a few others decided to create a centralized sale to Wall Street 22. Sellers would deposit the securities they wanted to sell, buyers would participate in the auction, and auctioneers would take a commission on the sale price. The Buttonwood Agreement was signed in 1792 between 24 Wall Street brokers and traders in New York to create a stock exchange. Rumor has it that the deal happened under a button tree marked the beginnings of the Wall Street investment community. Until 1793, too many brokers were involved to meet under a tree.

They took their place in an elaborate structure at the corner of Wall and Water streets, called Tontine Coffee House. Their new project was to become the largest investment market in the country – the New York Stock Exchange, which is only a few blocks from where the old button tree once grew. The agreement created confidence in the system in which brokers and traders acted only among themselves, while representing the interests of the public.