The Buttonwood Agreement took place on May 17, 1792, when 24 stockbrokers met outside of 68 Wall Street under a Buttonwood tree, launching what would become the New York Stock & Exchange Board now called the New York Stock Exchange. The organization later 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, the “New York Stock Exchange”.
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.|