8 March 1817: the New York Stock Exchange is formed

On this day in 1817, a group of brokers moved out of a New York coffee house to form what would become the biggest stock exchange in the world.

The New York Stock Exchange is huge. In fact, at over $25trn, it's the biggest stock exchange in the world by market capitalisation. But its beginnings are a far more humble affair. And it all started under a Buttonwood tree outside 68 Wall Street in May 1792.

That spring day, 24 New York City brokers met to agree on a new system to buy and sell securities, such as bonds and shares. Until then, trading meant going down to the auction, particularly when it came to soft commodities such as wheat and tobacco. But the Buttonwood Agreement changed all that.Of course, in these early days, investing was fairly straightforward. Just five securities mostly bonds were listed from the headquarters at the Tontine Coffee House.

Over the next quarter of a century, American trade grew, and New York overtook Philadelphia has the financial centre of the United States. Twice a day, the president of the exchange would read out a list of securities, at which point the brokers would buy and sell. It was all a far cry from today's world of computer-driven high-frequency trading.

As the number of securities increased, it was time to move out of the coffee shop. On 8 March 1817, the Buttonwood Agreement formally became the New York Stock & Exchange Board, with rented rooms at 40 Wall Street, a new set of rules and a constitution.

The opening of the Erie Canal and the arrival of the railways in America from the 1830s onwards brought a surge in business to the exchange. By 1835, an average of 8,500 shares were being traded daily a 50-fold increase in the space of just seven years.Since then, the New York Stock Exchange has moved home several times, and witnessed numerous boom-and-bust cycles all on its way to becoming the world's biggest and, arguably, most important stock exchange.

Recommended

US stockmarkets shrug off signs of overheating
US stockmarkets

US stockmarkets shrug off signs of overheating

Signs of overheating in the markets are everywhere, but that didn't stop US stocks hitting new record highs last week.
29 Jan 2021
US stockmarkets shrug off the mob's rampage through the US Capitol building
US stockmarkets

US stockmarkets shrug off the mob's rampage through the US Capitol building

US stockmarkets seem more interested in the results of Senate elections in Georgia than on the lawless mob's raid on the country's Capitol building.
14 Jan 2021
Arm Holdings takeover: has Nvidia had its chips?
Tech stocks

Arm Holdings takeover: has Nvidia had its chips?

The takeover of Britain’s semiconductor group Arm Holdings by its US rival Nvidia could be running into the sand, says Matthew Partridge.
22 Apr 2021
Coinbase, America’s largest crypto exchange, is going public. Should you invest?
US stockmarkets

Coinbase, America’s largest crypto exchange, is going public. Should you invest?

Cryptocurrency exchange Coinbase is to list on the Nasdaq stock exchange, hoping to cash in on the current crypto-mania. Saloni Sardana looks at wheth…
13 Apr 2021

Most Popular

China owns a lot more gold than it’s letting on – and here’s why
Gold

China owns a lot more gold than it’s letting on – and here’s why

In a world awash with money-printing, a currency backed by gold would have great credibility. And China – with designs on the yuan becoming the world’…
21 Apr 2021
“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?
Bitcoin

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?

Dogecoin – a cryptocurrency created as a joke – has risen by more than 9,000% this year alone. Saloni Sardana looks at how something that began as an …
19 Apr 2021
House prices in the UK are still surging – here’s why it’ll probably continue
Property

House prices in the UK are still surging – here’s why it’ll probably continue

The latest UK house price data shows no letup in the country’s booming property market, with the biggest yearly rise since 2014. And there’s no end in…
22 Apr 2021