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On this day in New York · May 17, 1792

Twenty-Four Brokers Sign the Buttonwood Agreement

Outside a tree on Wall Street, a handful of traders burned by a market crash wrote themselves a one page rulebook, and it grew into the New York Stock Exchange.

Twenty-Four Brokers Sign the Buttonwood Agreement
Wikimedia Commons / New York Stock Exchange Building

The facts

Date
May 17, 1792
Location
Outside 68 Wall Street, Manhattan
Signers
24 brokers and merchants
Fixed commission
One quarter of one percent on trades

Wall Street had just lived through its first crash. The Panic of 1792 wiped out speculators after William Duer's scheme to corner the market in Bank of the United States shares fell apart, and brokers were sick of dealing with outside auctioneers who played by no rules at all. On May 17, 1792, twenty four brokers and merchants gathered outside 68 Wall Street, near the buttonwood tree where they had long done business, and signed a short pledge: trade only with each other, and never undercut the group on commission. It was not a stock exchange yet. It was a trust pact among people who had stopped trusting anyone else.

In their words

The day in the words of the people who were there. Every quote is verbatim, and every source links out so you can check it.

  1. We the Subscribers, Brokers for the Purchase and Sale of the Public Stock, do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day for any person whatsoever, any kind of Public Stock, at a less rate than one quarter percent Commission on the Specie value and that we will give preference to each other in our Negotiations. In Testimony whereof we have set our hands this 17th day of May at New York, 1792.

    The Buttonwood Agreement, signed by 24 New York brokers, May 17, 1792

    Source: Wikipedia

Why it still matters

That one page of promises grew into the New York Stock and Exchange Board by 1817 and eventually the New York Stock Exchange, the institution that still decides what your retirement account is worth by the closing bell.

Sources

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