Of sycamore, coffee, and high finance — the Stock Exchange story

New York, situated in a large, natural harbor, was always a port city. Since the 17th century, the trade routes between Europe and the American continent went through the city’s bustling port. The goods such as wheat, tobacco, coffee, sugar, molasses, cotton, and rum traveled in one direction while fine furniture, tea, cloth, and, sadly, enslaved people in the other. The port’s market where the wares were evaluated, exchanged, and sold was located at the foot of Wall Street, making it the center of the city’s financial activity.

As commerce got more sophisticated, the trade was often arranged through brokers who bought and sold products as well as commercial stocks. (Another hot item added to the market in the late 18th-century was Revolutionary War bonds.) Brokers met daily in front of 68 Wall Street, where the sprawling buttonwood tree provided its leafy cover to the ever hustling businessmen. In order to bring some order to the chaotic trading activity, 24 brokers decided to deal only with one another and always charge a standard commission rate. In 1792, they signed a document called the Buttonwood Tree Agreement that led to the formal organization of what was to become the New York Stock Exchange.

The Tontine Coffee House, Wall & Water Streets, About 1797. From a Painting Owned by the New York Historical Society. Francis Guy, The Tontine Coffee House is on the left with a flag.

Meeting under the tree undoubtedly had its benefits; however, even the toughest New York brokers were not immune to the whims of local weather. The advantages to taking their business meetings indoors were further incentivized by the agreeable prospect of doing business over coffee. A group of New York merchants belonging to the Tontine Association constructed a Coffee House on the northwest corner of Wall Street and Water Street. The Tontine Coffee House became a center for business transactions, political discussions, trading stocks, and having coffee.

In 1817, the organization moved slightly up the street to 40 Wall Street and updated its name to “New York Stock and Exchange Board.” The institution led a nomadic existence, moving all over Wall Street and its vicinity until 1865. It finally settled into the newly built home, located at Broad and Wall, precisely where the present-day NYSE stands.

As New York emerged as the nation’s financial center and the Exchange Board grew, the old building was no longer adequate and, in 1903, was replaced by the one we see now.

Stock Exchange, 1939, via MCNY Digital Collection

Per the time-honored tradition, the New York Stock Exchange starts its trading session at 9:30 a.m. and closes it at 4 with the sound of a bell. The tradition started in the 1870s with the advent of continuous trading, except instead of bells, there was a Chinese gong. After the Exchange moved to its current building in 1903, the gong was replaced by a more modern electrically operated brass bell — with sound big enough to resonate throughout the main trading floor. These days, a single control panel operates four bells for each of the four trading areas of the NYSE. The honor of ringing the bell is bestowed upon celebrities or dignitaries visiting the stock markets or companies trading for the first day.

In terms of growth, it t’s astounding how the organization that started with 24 brokers under a buttonwood tree became the most influential financial organization in the world. In terms of distance – not so much; it just moved a few blocks along Wall Street.

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