on this day in 1792

Traders make deal under a buttonwood tree on Wall Street

The early 1790s were not a good time for New York's burgeoning class of speculative traders. Their collective reputation had been badly tarnished by the fall of William Duer, a powerful speculator who illegally parlayed privileged information into successful speculative trades. Along with an extended jail term, the maneuver left Duer broke, which all but destroyed the traders' nascent market. However, rather than give up on speculative trading, the dealers and auctioneers decided to clean up their operations. On this day in 1792, a group of twenty-four traders gathered under a buttonwood tree at 68 Wall Street in lower Manhattan to mete out the conditions and regulations of the speculative market. The result was the Buttonwood Agreement, a modest, two-sentence contract that gave birth to the New York Stock Exchange, which would become the world's largest forum for trading stocks and securities. Where speculators had previously conducted their auctions twice a day in various locations, including street corners and coffeehouses, the Buttonwood Agreement established stricter rules and parameters to more effectively govern trading.