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Buttonwood refers to the fine grained wood of the American sycamore which was often used for making wooden buttons. Sycamore wood can be finely milled without cracking; perfect for producing long-lasting clothing and shoe buttons. Indeed, my West Virginian grandfather always called sycamore trees "buttonwood."
The Buttonwood Agreement was signed in 1792. It was written by 24 stockbrokers and merchants on Wall Street in New York City and formed the foundations of the New York Stock Exchange. The agreement was signed under a buttonwood tree, according to historical lore.
In 1971, NYSE became a not-for-profit corporation. Corporations are allowed to enter, and in 2006, a publicly-traded company. It was also during this time when traders and the public started using an electronic system to trade stocks.
Still, "Wall Street" remains a collective name for the financial markets, the companies that trade publicly, and the investment community itself: stock exchanges, investment and commercial banks, brokerages and broker-dealers, financial services, and underwriting firms.
The Buttonwood Agreement Gets Its Name From A Tree It's hard to imagine now, but Wall Street once had more trees than skyscrapers. The founders of the NYSE often met under a buttonwood tree outside 68 Wall Street to discuss trades and investments.
On , the story goes, twenty-four stockbrokers gathered beneath a buttonwood tree on Wall Street and signed an agreement that grew into the mighty New York Stock Exchange (NYSE).
Many visitors to Wall Street hardly notice the solitary buttonwood tree standing outside the New York Stock Exchange. As it happens, the New York Stock Exchange is one of the only buildings in the Financial District that hosts a tree in front of it but it's not just any tree.
The rules set under the Buttonwood Agreement were based on existing European trading systems of the time. The agreement aimed to create trust in the system whereby the brokers and merchants would only trade with each other and charge a set commission for their services.
The Buttonwood Agreement is the founding document of what is now New York Stock Exchange and is one of the most important financial documents in U.S. history. The agreement organized securities trading in New York City and was signed on between 24 stockbrokers outside of 68 Wall Street.