Under a leafy button tree,

The town officers rose to their feet;

The runners, a powerful group you see,

I would change everything I could;

They soon developed commissions

Which for the runners was so good.

This might not be what Henry Wadsworth Longfellow would have had in mind as part of his poem, “The Village Blacksmith”; but the story of how the New York Stock Exchange started reminded me of his famous line. The formation of the New York Stock Exchange (NYSE) supposedly occurred when 24 of the most prominent brokers and speculators in the United States got together and struck a deal.

It was said that they put “Buttonwood” under a tree to conceptualize the vision that marked the beginnings of the Wall Street investment community. Some cynics would say that this story sounds far-fetched; but by all accounts, this is the way it happened.

Where exactly was this button tree? It was near a 12-foot-high wooden stockade along the Hudson and East rivers, built in 1653, under the direction of Governor Peter Stuyvesant, to protect Dutch settlers from Lenape Indians, New England settlers. and the British. At the same time, a street was also beginning to develop along the wall on the city side. This street was called Wall Street.

Over the years, the feared attacks never materialized and the thick plank wall began to fall into disrepair. Eventually, citizens and farmers began tearing down the wall to use the planks as building materials or firewood. The wall completely disappeared in 1699, but the street retained the name “Wall Street”. However, it would still be more than a hundred years before the financial markets could call Wall Street their birthplace.

So what prompted these 24 prominent brokers, speculators, and merchants to gather under that “button” tree in 1792? The catalyst seemed to have come at the end of the Revolutionary War when the first stock certificates were traded in the United States. It was in 1790 that soldiers and merchants who participated in the war began to redeem the script that the Federal Government had issued to them during the war.

The birth of the investment market was marked by these first issuances of publicly traded securities. These visionary entrepreneurs wanted to get involved in this new and possibly lucrative venture. It was then, at that famous meeting in 1792 under the buttonwood tree, that they agreed to sell securities as private transactions in their private organization and to charge commissions on the transactions. This came to be known as the “Buttonwood Agreement”.

Initially, the brokers conducted their business out of the Tontine Coffee House on Wall Street because they were not headquartered; and they didn’t even have a name for their organization. However, this group would come to be known as the New York Stock Exchange (NYSE).

It was at the same time that the Government created the first bank, the Bank of New York. In fact, the first corporate stock traded by the “Brokers of the Buttonwood Tree” was the Bank of New York. It was also the first company to be listed on the New York Stock Exchange.
The formal organization was established in 1817 and was called the New York Stock & Exchange Board. At 68 Wall Street they soon developed a set of rules and a constitution, drawn up on March 8, 1817, for conducting business. It was not until 1863 that the name was finally shortened to the New York Stock Exchange.
Since 1868, having a membership in the NYSE has been considered valuable property. Currently, prospective members must purchase existing seats which total 1,366.

Today, Wall Street has become a “pedestrians only” street. It is at the end of that street at Federal Hall that the inauguration of President George Washington took place on April 30, 1789. There is a statue of Washington at the exact location of the inauguration, and the current building there, erected in 1842, it was the first US Customs House. From the Washington statue there is a good view of the New York Stock Exchange, which is actually on Broad Street, not Wall Street. What stands out about the NYSE Building, however, are the sculpted figures and Corinthian columns, which have become universal symbols of American commerce and finance.

The New York Stock Exchange has come a long way since the “prominent 24” signed the “Buttonwood Agreement” in 1792. Billions of dollars change hands here every day. The New York Stock Exchange, from humble beginnings, has become the world’s center for financial transactions and the largest stock market. Yes, indeed, under the leafy little button…

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