Buttonwood Agreement

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Depiction of traders under the buttonwood tree

The Buttonwood Agreement, which took place on May 17, 1792, started the New York Stock & Exchange Board now called the New York Stock Exchange. This agreement was signed by twenty-four stock brokers outside of 68 Wall Street New York under a buttonwood tree. The organization drafted its constitution on March 8, 1817, and named itself the "New York Stock & Exchange Board". In 1863, this name was shortened to its modern form, "New York Stock Exchange".

Contents

Document agreement

In brief, the agreement had two provisions: 1) the brokers were to deal only with each other, thereby eliminating the auctioneers, and 2) the commissions were to be 0.25%. It reads as follows:

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.[1]

Source Document

The document's physical location is not known. The Virtual Museum and Archive of the History of Financial Regulation of The Securities and Exchange Commission Historical Society does have this image.

Names and address

The twenty-four brokers (also known as, Founding and Subsequent Fathers) who signed the Buttonwood Agreement were (including business location):[2]

The Buttonwood Agreement is honored by the name of the financial markets column in The Economist.

Tontine Coffee House

Later in 1793, they conducted their business inside the Tontine Coffee House.[1]

References

  1. ^ a b Richard J. Teweles, Edward S. Bradley, and Ted M. Teweles (1992). The Stock Market (6th Edition). p. 97. 
  2. ^ Peter Wyckoff (1972). Wall Street and the stock markets: A chronology (1644-1971). p. 145. ISBN 0-8019-5708-7.