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May 17, 1792Primary source · 2 sourcesWell documented

Twenty-Four Brokers Sign the Buttonwood Agreement

A short pact under a Manhattan shade tree becomes the New York Stock Exchange

On the timeline · around May 17, 1792 · Modern FinanceModern FinanceThe Age of Fiat and Digital MoneyTwenty-Four Brokers Sign the Buttonwood Agreement17001750180018501900

Quick facts

Signed
May 17, 1792
Signatories
24 New York stockbrokers
Minimum commission set
0.25 percent
Became
New York Stock and Exchange Board (1817), later the NYSE

What happened

On May 17, 1792, in the aftermath of the young United States' first financial panic, 24 New York stockbrokers signed a short agreement organizing how they would trade securities with one another. The pact was named for the buttonwood tree, an American sycamore, on Wall Street where the traders had been meeting informally. Its terms were simple: the signatories would trade securities only with each other, giving preference to fellow members over outside brokers or auctioneers, and would charge a minimum commission of one-quarter of one percent on transactions. The agreement was an attempt to bring order and trust to a market that had just seen deals collapse and be reneged upon during the Panic of 1792. In 1817 the group formalized itself further as the New York Stock and Exchange Board, the direct ancestor of the New York Stock Exchange.

Why it matters

The Buttonwood Agreement is treated as the founding document of the New York Stock Exchange, which grew into one of the largest and most influential financial markets in the world. It marks the moment American securities trading shifted from informal street dealing toward an organized, rule-bound exchange, part of the same broad development, alongside central banks and joint-stock companies, that built the modern apparatus for turning capital into tradable paper.

How we know

The original Buttonwood Agreement document survives and is held in the collections associated with the NYSE, and its signatories, terms, and 1792 date are documented in the exchange's own historical records and in contemporary accounts of early Wall Street.

Sources

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Twenty-Four Brokers Sign the Buttonwood Agreement · History of Money · SourcedStory