tution we know today as the New York Sock Exchange began in 1792 as an effort to circumvent government regulation (Blume 21). Twenty-four...stock brokers, with no building or even a formal title, met under a buttonwood tree on the north side of Wall Street... (Blume 23) there they made a deal that went on to be known as the Buttonwood Agreement. In it were these words: We the Subscribers, Brokers for the Purchase and Sale of Public Stock, do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day for any person whatsoever any kind of Public Stock, at a less rate than one quarter percent Commission on the Specie value of, and that we will give a preference to each other in our Negotiations (Blume 23). To these brokers' great delight, their idea became very popular amongst investors and brokers alike. They bought office space on Wall Street, where the Buttonwood Agreement was made. That office space later went on to be called the New York Stock Exchange. They grew and expanded the Exchange so that it became the only place to buy stocks if a profit was to be made. This system was a good one, but there were ways to beat it. Some of the outstanding financial powers of the United States often used their wealth to corner the stock market. All of these powers had monopolies in large business areas such as oil, steel, railroads and banking. The government tried to stop monopolies from forming by passing the Sherman Anti-Trust Act of 1890 (Blume 270). This did not stop these giants, however. They often engaged in financial battles for control of the market. In one of these instances, J.P. Morgan and Harrimen both wanted control of the Northern Pacific Railroad Company in 1901 (Sharp 165). Harrimen decided to buy his way to majority share holder of the company, thereby allowing him to run the business. Morgan then bought all the outstanding stock available. This activity raised the stock price from...
