Reacting to a financial panic earlier that year, 24 brokers gathered on Wall Street and signed an agreement fixing trading rules and commissions among themselves, cutting out auctioneers. This simple pact, signed beneath a buttonwood tree, laid the institutional groundwork for the New York Stock Exchange, which would grow into the world's largest financial market.
The agreement emerged from crisis. Earlier in 1792, speculator William Duer had triggered Wall Street's first financial panic by over-leveraging bets on government bonds and bank shares, causing a credit crunch that rippled through New York's small merchant economy. Brokers realized that without agreed rules, trust in securities trading would collapse entirely.
The document itself was short: a pledge that signers would trade only among themselves at fixed minimum commissions, favoring each other over outside auctioneers who had previously handled securities sales alongside sugar, tobacco, and other goods. It was less a stock exchange charter than a cartel agreement, but it created the exclusivity and self-regulation that would define Wall Street's culture for centuries.
The brokers met initially at the Tontine Coffee House before eventually formalizing into the New York Stock and Exchange Board in 1817. The buttonwood tree itself, at 68 Wall Street, is long gone, but its name lives on as shorthand for the origin of American capital markets.
Key people: William Duer