John J. Phelan Jr., a former chairman of the New York Stock Exchange who introduced computer technology to the Big Board in the 1980s, died on Saturday. He was 81.
His death was announced in a statement by Duncan L. Niederauer, chief executive of NYSE Euronext.
Mr. Phelan, a staff sergeant in the Marine Corps who worked as a trader before rising through the ranks at the stock exchange, was known for keeping a cool head following the stock market crash of October 1987, which shook investors' confidence in financial markets. He famously kept the exchange open that day, in spite of widespread fears.
“He deserves eternal credit for that,†Felix G. Rohatyn, a longtime investment banker who helped save New York from bankruptcy in the 1970s, told The New York Times on Mr. Phelan's retirement in 1990. “That was his shining hour.â€
In a letter to Mr. Phelan several days after the crash, President Ronald Reagan praised the functioning of the exchange d uring the panic. Mr. Phelan read the letter aloud to his staff from the podium overlooking the trading floor.
“The calm, professional manner of dedicated men and women striving to meet unprecedented challenges undoubtedly helped assure investors of the soundness of the institution,†Mr. Reagan wrote.
Mr. Phelan, known as a soft-spoken and private man, oversaw the Big Board throughout the 1980s, first as president from 1980 to 1984 and then as chairman from 1984 to 1990.
“John was an extremely generous and caring individual, and as chairman and C.E.O. of the New York Stock Exchange and throughout his career John served our capital markets, investors and all market participants with outstanding professionalism, commitment and integrity,†Mr. Niederauer said in the statement.
As trading volume exploded in the 1980s, Mr. Phelan introduced new technologies to the once-stodgy exchange. Under his leadership, the exchange spent millions of dollars to implement systems to handle huge volumes of orders.
Mr. Phelan considered this investment in technology his proudest achievement. A line from Machiavelli's “The Prince†stood framed outside his office in 1987: “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.â€
The technological changes helped usher in a new era on Wall Street. Computerized trading lowered costs for small investors and helped make markets more liquid.
In recent years, new technologies have also introduced new risks. Those risks were on display last week with a glitch at the Knight Capital Group, and earlier this year with the botched initial offering of BATS Global Markets and the disappointing debut of Facebook on the Nasdaq market.
In an interview with The New York Times after the 1987 crash, Mr. Phelan outlined his concerns about financial advanceme nts.
“The markets are not for individual professionals to make money in. They are really for corporations to raise capital so you can invest in this country and get a better standard of living,†he said. “If we destroy the markets by too much volatility, too much professional trading, too much leverage, we ruin their credibility and we ruin the function for which they are supposed to exist.â€
Those who knew him said Mr. Phelan had a steady judgment and a warm sense of humor, despite his quiet exterior.
“He had a reputation for being a standup personality,†said Arthur Cashin, UBS Financial Services director of floor operations at the N.Y.S.E.
Mr. Phelan is survived by his wife, Joyce, and three sons John, Peter and David.
