--- title: New York Stock Exchange at 225: Buttonwood Agreement History description: It was 225 years ago that the Buttonwood Agreement set up trading rules to reestablish confidence after a financial panic in 1792. canonical: https://time.com/4777959/buttonwood-agreement-stock-exchange/ author: Olivia B. Waxman article:opinion: false article:content_tier: free article:published_time: 2017-05-17T13:00:03.000Z article:modified_time: 2026-02-23T04:54:27.449Z article:section: History og:title: New York Stock Exchange at 225: Buttonwood Agreement History og:description: It was an attempt to reestablish confidence after a financial panic in 1792 og:url: https://time.com/4777959/buttonwood-agreement-stock-exchange/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blteb17bca4372823a2/6988cd260b72e3062e6edc45/1792-buttonwood-mural.jpg?branch=production&width=1200&quality=75&auto=webp&crop=16:9 og:image:width: 3174 og:image:height: 1785 og:image:alt: 1792-buttonwood-mural og:type: article twitter:card: summary_large_image twitter:title: New York Stock Exchange at 225: Buttonwood Agreement History twitter:description: It was an attempt to reestablish confidence after a financial panic in 1792 twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blteb17bca4372823a2/6988cd260b72e3062e6edc45/1792-buttonwood-mural.jpg?branch=production&width=1200&quality=75&auto=webp&crop=16:9 ---  # How a Financial Panic Helped Launch the New York Stock Exchange > Sponsored content. 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In the Loop is TIME's AI newsletter, built on original reporting and access to the people building and governing AI. It publishes Tuesdays and Fridays and is free at time.com/newsletters. #### Who writes TIME's In the Loop? Harry Booth, a tech reporter at TIME, writes In the Loop. #### Is In the Loop free? Yes. In the Loop is free at time.com/newsletters.  by [Olivia B. Waxman](https://time.com/author/olivia-b-waxman/)  ## Olivia B. Waxman Staff Writer May 17, 2017 1:00 PM UTC  A photo of the restored mural reimagining the signing of the Buttonwood Agreement at 1792, the bar and restaurant at the New York Stock Exchange. A photo of the restored mural reimagining the signing of the Buttonwood Agreement at 1792, the bar and restaurant at the New York Stock Exchange. Courtesy of the New York Stock Exchange  by [Olivia B. Waxman](https://time.com/author/olivia-b-waxman/)  ## Olivia B. Waxman Staff Writer May 17, 2017 1:00 PM UTC Long before [One World Trade Center](http://time.com/3904514/one-world-trade-center-observatory-time-lapse-video-construction/) towered over Lower Manhattan, an American sycamore or buttonwood tree on Wall Street was the tallest thing in the area, and the center of commerce. It was 225 years ago, May 17, 1792, under that very tree, that 24 stockbrokers and merchants signed the so-called Buttonwood Agreement, establishing the parameters for trading in the first incarnation of the [New York Stock Exchange. ](http://time.com/3949784/nyse-trading-chart/) They agreed that they’d only trade with each other and represent the interests of the public, which meant that the confidence that they had in each other was the confidence that they had in the market. In other words, they wouldn’t have to be worrying about selling bad stock or competition over commission rates, so the prices charged would reflect the value of the stock, not some other factor. The exact text reads: --- > “” --- The trades they made at the time were what would be considered commodities trading, according to Peter Asch, the New York Stock Exchange’s historian. In the late 1700s, available stock was limited to insurance companies, the Bank of New York, the First Bank of the United States and “Hamilton Bonds” that [Alexander Hamilton ](http://time.com/4773101/alexander-hamilton-letters-for-sale/)had decided to issue to deal with America’s Revolutionary War debt. (The system was considered risky and [criticized for making the wealthy wealthier](http://time.com/4669729/conflict-of-interest-history/).) The agreement was an attempt to establish some rules after the 1792 financial panic, at which point there had been no rules or safeguards, and a lot of deals were reneged on. The panic had been instigated by the actions of the speculator William Duer, who borrowed to make trades until he found that he couldn’t borrow anymore. “He was betting that the market was going to go down while everyone else was betting that it was going to go up,” as economic historian Robert E. Wright puts it, until he ran out of money. “He stops making payments, so everyone is out their money and starts wondering who lent to Duer and if _those_ people would make their payments.” The situation was similar, Wright adds, to what happened more recently when Lehman Brothers went bankrupt and people started wondering who the firm owed money to. So people panicked, and started selling. The more they sold, the more prices dropped, making people panic even more — until Alexander Hamilton worked with the First Bank of the United States to stop the panic. Brokers signed the Buttonwood Agreement as a way to reestablish confidence and encourage people to start investing again. “It’s profitable to be in this club, so you’re going to follow the rules because you want to remain in the club,” as Wright describes the rationale. “They might lose on one deal, but being in the club is so lucrative that they know they’ll make it back on another day. 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