This Story was Originally Published in the Book “Sikh Spiritual Practice” by Siri Kirpal Kaur Khalsa
Word came to Guru Arjan Dev that his older brother, Prithi Chand, was writing poems and signing them with the name of Nanak, the signature of Guru Nanak and all his successors—a signature Prithi Chand had no right to use. These poems did not have the uplifting impact of the Shabads of the True Guru.
Realizing the harm these spurious Shabads could do, Guru Arjan Dev decided to create a definitive canon of Shabads.
The most complete collection of Shabads composed by the first three human Gurus was in the hands of Mohan, the eldest son of Guru Amar Das. So Guru Arjan Dev dispatched his secretary, Bhai Gurdaas, to request this collection from Mohan. Bhai Gurdaas returned unsuccessful. Baba Buddha, a respected and elderly Sikh who had been one of Guru Nanak’s followers and who had already installed four of Guru Nanak’s successors (he would later install one more), then offered to go. He returned unsuccessful as well.
So Guru Arjan Dev himself went from Amritsar to Goindwal to entreat Mohan to part with his collection. No one at Mohan’s house answered his call. So Guru Arjan Dev began to sing sweetly.
“O Mohan, lofty is your mansion and matchless is your palace.
O Mohan, saints adorn your temple doors.
In your temple, they ever sing the praises of the Infinite and Merciful God.
Where the company of the saints assemble, they meditate on you.
Show compassion and kindness, O Compassionate One, and be merciful to the poor.
Nanak says, I am thirsting for a sight of you, grant it to me, and all happiness will be mine.” 
After this verse, Mohan opened the door. After two more verses in a similar vein, Mohan handed the collection of Shabads over to Guru Arjan Dev, who then sang one final verse.
“O Mohan, may you be successful with your family.
O Mohan, you have saved your children, friends, brethren and family.
You have saved those, who having beheld you, have dispelled their pride.
Death never approaches those who magnify you.
Endless are Your excellences; they cannot be described, O True Guru and Supreme God.
Says Nanak, You have preserved a prop clinging to which the world shall be saved.” 
While this treasure trove of Shabads and his own Shabads formed the nucleus of the collection, Guru Arjan Dev received Shabads and poems from other people as well. He called for Shabads written by Hindu and Muslim/Sufi saints. He called for the exquisite poetry of his secretary Bhai Gurdaas, who declined the honor, but whose Shabads are still sung in Sikh Gurdwaras everywhere.
Guru Arjan Dev did receive Shabads from other contemporary bards. With this wealth of material, he set to work to form his collection. He didn’t accept everything he received for this collection. He rejected anything that was too emotional or egotistical, anything that was idolatrous, anything that denigrated women, anything that promoted isolation from humanity as the path of salvation, anything that upheld the caste system or other forms of discrimination, and anything that wasn’t in Naad.
Naad, which literally means sound current or inner sound, is the key to the value of the Shabad Guru. Shabads are designed to be sung and recited out loud. When Shabads are in Naad, the act of singing or reciting them types a code on the upper palate of the mouth that triggers the experience of God consciousness in the singer/reciter. Absolutely everything Guru Arjan Dev allowed into his magnum opus, which was to be called the Adi Granth, has this quality.
Adi Granth literally means “Primal Knot”—that which ties a knot between the disciple and the Divine. Chanting those words, singing those words, raises the singer’s consciousness to the level of the saints who originally wrote or sang the words.
To emphasize the need to sing and recite the Shabads, Guru Arjan Dev arranged the Adi Granth as a songbook. The Shabads do not appear in alphabetical order. They do not appear in chronological order. They are not organized by subject. The way Guru Arjan Dev placed them is according to the Raag, or melodic mode, they were originally written in.
Within each Raag, Shabads are grouped by author and by length. Those few Shabads not originally written in any Raag appear in the Adi Granth and its successor, the Siri Guru Granth Sahib, either before or after the ones that are in Raag.
For approximately three years, Guru Arjan Dev selected the Shabads and dictated them to his secretary Bhai Gurdaas. They completed this labor of love on August 15, 1604. It took another15 days to create an index and have the Adi Granth bound.
The Adi Granth was installed in Amritsar (which means Nectar Tank) at the Hari Mander Sahib (literally “Great Temple of God”—now known to us as the Golden Temple) in a gala ceremony on August 30, 1604.
Baba Buddha, the elderly Sikh who in childhood had followed Guru Nanak, carried the Adi Granth on his head. Guru Arjan Dev walked behind carrying a chauri sahib, or fly whisk, so indicating that he was the Adi Granth’s servant.
Accompanying them were many, many Sikhs singing kirtan (Shabads set to music and sung). Baba Buddha reverently placed the Adi Granth on a decorated throne inside the Hari Mander Sahib—which is situated in the middle of the pool of water that gives Amritsar its name. He then opened the Adi Granth at random and took the first Hukam—literally “command,” a reading for Sikhs to ponder and follow.
It began like this:
God has come to complete the tasks of His Saints.
God has come to do their work.
In this beauteous land, in the beauteous pool, is contained the nectar water.
Filled with this nectar water, tasks are completed and all desires are fulfilled.
Cheers of victory resound around the world, and all sorrows are ended. 
Guru Arjan Dev had appointed Baba Buddha to be the first Granthi, or caretaker of the Granth. So, when the ceremony ended, Baba Buddha asked Guru Arjan Dev where he should put the Adi Granth. Guru Arjan Dev told him to place it on his (Guru Arjan Dev’s) bed. Thereafter, Guru Arjan Dev slept on the floor.