By Kenneth G. Pringle

The Buttonwood Agreement that got the New York Stock Exchange started -- a single, handwritten page -- couldn't have been more low-tech.

Since that document was signed on May 17, 1792, by 24 stockbrokers who often conducted business under a buttonwood tree outside 68 Wall St., the financial markets have eagerly embraced new technologies.

The adoption of revolutionary advances such as the telegraph and artificial intelligence have been driven by two entwined desires: the need for more speed to transmit orders and data, and the need for more investors to fund an ever-growing economy.

Here are nine technological advancements that helped turn investing from a private club of two dozen into something of a national pastime . Almost two-thirds of American adults today report owning stocks, and trading can be done on computers, smartphones and under any buttonwood tree at all.

1. Electric telegraph

In the nation's earliest years, a largely agrarian society where things moved at the speed of a horse at best, each city conducted its own financial business, such as it was.

With four words -- "What hath God wrought!" -- sent over the first working electric telegraph wire in 1844, Samuel Morse helped change the status quo, and helped catapult New York into a leading position.

"Business finally awoke to the potential of such devices," writes historian Robert Sobel in "The Big Board: A History of the New York Stock Market."

With Wall Street's backing, Morse formed the Magnetic Telegraph Co. to run a line from New York to Philadelphia. Among the first customers were traders.

Now Wall Street prices could be quoted the same day in Philadelphia, and soon in Boston, Buffalo and west to the Mississippi as the telegraph covered the nation like a spider web.

"By the end of the [1850s] Wall Street was connected to every important American city, and set prices for them all," Sobel writes. "Wall Street had become the market for the nation."

Yet if Wall Street was going to be America's financial marketplace, it needed a faster way than the horse to physically exchange money and certificates.

2. Railroad

Stagecoach services, like the pony express, took days to traverse the gutted tracks across the wilderness that still separated America's nascent cities.

The railroad cut the time down sharply -- to the same day, in many cases -- allowing for a truly nationwide system of purchase and delivery. U.S. rail mileage rose from less than 30,000 miles in 1860 to 163,500 in 1890, usually with a telegraph line running alongside.

And railroads were America's first big businesses. The Pennsylvania employed more than 50,000 in the 1880s, when the largest textile mills had perhaps 1,000 workers.

These huge operations demanded vast amounts of capital, and Wall Street provided it. While banking and insurance issues had dominated early Wall Street, by 1856, the value of railroad stocks and bonds was greater than everything else combined, according to Sobel in "The Big Board."

This was the age of the original "robber barons," like Cornelius Vanderbilt and Jay Gould, whose great fortunes and "crass unscrupulousness became part of the mystique of the new phenomenon of Wall Street," Michael Hiltzik writes in "Iron Empires: Robber Barons, Railroads, and the Making of America."

But this time also saw the rise of the individual investor, who was tapped to help finance the railroads. In 1853, the New York Central and the Pennsylvania, just two of hundreds of "roads" now linking the nation, each reported more than 2,400 individuals owning shares.

Democratization of investing accompanied its baronization.

3. Stock ticker

The frontiersman poet Joaquin Miller was assigned to write about a week spent on Wall Street. He stayed six months, made and lost a fortune, and gave us the indelible image of the Wall Street speculator.

"Around this 'ticker' gathered and grouped a knot of eager, nervous, and anxious men. Ten, fifteen, or twenty at a time would clutch at the tape, as it streamed out with its endless lines of quotations," Miller wrote in the Chicago Tribune of Oct. 30, 1880.

While the telegraph and railroad were innovations meant for general use, the stock ticker was the first advancement designed specifically for trading. It used telegraph lines to report transactions in almost real time, printing them out on rolls of tape in abbreviations that insiders could interpret. Edward A. Calahan is credited with the invention in 1863. Thomas Edison developed the first practical model six years later.

The ticker replaced the swift-running lads who previously delivered price quotes from the telegraph office. Now, the quotes arrived in the office of anyone who could afford $6 a week -- a price that would drop as competition heated up.

The ticker also brought in a large new class of investor who was looking to get rich quick. "When I tell you that there are more than 5,000 of these 'tickers,' " Miller wrote, "you can form some idea of the magnitude of the business."

There was so much used ticker tape lying around Wall Street, in fact, that during a parade for the dedication of the Statue of Liberty on Oct. 28, 1886, "many imps of office boys" found a new use for it, the New York Times reported in an article the next day.

"[F]rom a hundred windows began to unreel the spools of tape that record the fateful messages of the 'ticker,'" the article said. "Such was Wall-street's novel celebration."

The ticker remained an indispensable investing tool into the 1970s, but the ticker-tape parade outlasted it.

4. Telephone

Another result of the railroad boom was the growth of investment banks, financial institutions large enough to finance such sprawling ventures. One of these -- Kidder, Peabody & Co. -- helped bankroll the next great innovation that changed investing: the telephone.

Alexander Graham Bell patented the telephone in 1876. Two years later, the NYSE had one installed, but there were hardly any other phones to connect with. The hard part, and the costly part, was building out the infrastructure needed to link distant cities and millions of homes and offices.

Bell's American Telephone & Telegraph had a "continuing and mounting need for capital, amounts far greater than could be obtained from its traditional sources," Vincent Carosso writes in "More Than a Century of Investment Banking: The Kidder, Peabody & Co. Story."

Kidder Peabody's first offering for AT&T, in 1899, was $7 million in bonds (about $273 million in 2025 dollars). In 1906, faced with a $150 million placement, Kidder Peabody called in help, arranging a syndicate of J.P. Morgan & Co., Kuhn, Loeb & Co. and Britain's Barings Bank.

This set the model for Wall Street's role as underwriter of America's soon-booming industry.

The telephone itself quickly became a familiar sight on Wall Street, again taking the jobs of boys who previously ran orders down to the exchange. Now the orders could be phoned in.

By one count, there were 88,000 telephones in service in the Financial District in 1920. Along with its partner, the ticker, the telephone completed an investor tool kit that would stay basically unchanged for decades, through crash, depression and war.

5. Electronic ticker

Along with Gordon Gekko's slicked-back hair and singular take on greed, the 1987 movie "Wall Street" was notable for the high-tech offices crammed with computer screens flashing green text on black backgrounds.

The machines were from Quotron Systems. They represented the biggest technological change for Wall Street in decades.

Yet, while they gave "Wall Street" a sleek modern look, the dedicated Quotron terminals were more like the tickers Joaquin Miller marveled at in 1880 than today's PCs. All they did was print the ticker's data on a computer screen.

Still, it was a lot more convenient to get quotes at individual desks than huddling around the ticker. Starting in 1960, Quotrons spread across Wall Street, put to use by real-life Gekkos like Ivan Boesky, Carl Icahn and Michael Milken.

Quotron was leasing 80,000 terminals in 1986 when Citicorp swooped in for a not-so-friendly $680 million acquisition, what The Wall Street Journal called "the boldest business move" in John S. Reed's year-plus as Citi chairman.

It didn't work out. Five years later, Citi wrote down the investment and in 1994 essentially gave Quotron to Reuters.

Quotron had been the first to harness the computer for financial data, but it didn't foresee the possibilities of the internet.

6. Electronic and online trading

The National Association of Securities Dealers Automated Quotations system -- Nasdaq -- was launched on Feb. 8, 1971.

At first, it merely provided quotes for what had been an opaque over-the-counter market for unlisted stocks. It wasn't yet set up to execute trades, which still had to be done the old-fashioned way.

"My prediction is that a more sophisticated form of Nasdaq will become the new central marketplace," Wheelock Whitney, president of the Investment Bankers Association of America, told the group, according to The Wall Street Journal on April 5, 1971. "The thought is a little awesome."

Awesome, and spot-on. Nasdaq, with its meteoric rise as the NYSE's rival and incubator for generations of high-tech companies, has been at the center of the economy's booms, and busts, since its inception.

Eventually, Nasdaq helped turn online trading into the norm. Even the venerable NYSE adapted by all but abandoning the open-cry system that was its iconic symbol.

"In order to have liquid markets you didn't need to have professionals standing face to face yelling at each other," the first CEO of Nasdaq, Gordon Macklin, is quoted as saying in Mark Ingebretsen's "Nasdaq: A History of the Market That Changed the World." Macklin continued: "What we did with the Nasdaq was to create a trading floor that was 3,000 miles long and 2,000 miles wide."

Nasdaq created the virtual trading floor, and it would soon be populated by millions.

7. Online investing platforms

The newspaper ad, from 1996, features a man logging on to his home computer to trade stocks.

"Your broker is now obsolete," declares the ad, from a company called E*Trade Securities.

Brokers aren't obsolete. But nearly 30 years since E*Trade first offered discounted trading "on the Internet's World Wide Web," as Reuters put it, most investors do their own trading, without the help of a professional.

When E*Trade came online, it charged a commission of $14.95 per trade of up to 5,000 shares on the NYSE, and $19.95 for trading any number of Nasdaq shares. A retail broker would charge around $25 for similar trades, Barron's magazine suggested.

Since then, the growth of online trading brought in competitors like Charles Schwab and TD Ameritrade, and newer apps including Robinhood and Webull, and pushed the industry to a zero-commission model.

Now, instead of standing 20 deep at a ticker, everyone is hunched over their own devices, getting quotes as well as analysis and advice, trading on their lunch hour or on a beach vacation.

And if they have a broker, he's probably trading on his smartphone, too.

8. High-frequency trading

No one was ready for the flash crash of May 6, 2010, a "harrowing five-minute selloff" that sent the market to a midday drop of almost 1,000 points, or about 9%.

"It happened so quickly, it was like a torpedo," one market participant told The Wall Street Journal.

With no obvious news trigger for the crash, suspicion immediately fell on high-frequency trading firms, whose computer-driven algorithms accounted for two-thirds of overall market activity, according to the Journal.

Exactly what high-frequency trading had done to cause the crash, however, wasn't certain. That's because humans only serve in a kind of supervisory role, setting the trading parameters and then letting the algorithms do the buying and selling at computer speeds.

In 2015, the Justice Department laid blame for the flash crash on a single British trader for "spoofing," or posting orders with intent to cancel them before being filled. It wasn't a satisfying conclusion for many.

"[B]laming one trader who worked from his parents' house outside London for sparking a trillion-dollar stock market crash is a little bit like blaming lightning for starting a fire," wrote Traders Magazine.

The Commodity Futures Trading Commission was more circumspect, concluding in 2014 that high-frequency trades didn't cause the flash crash, but "contributed to it by demanding immediacy ahead of other market participants."

Despite the use of safeguards such as so-called circuit breakers, which halt trading in volatile issues, flash crashes have since hit markets in other nations and asset classes.

Perhaps it is time for the machines to solve the problem themselves.

9. Artificial intelligence

If high-frequency trading is done with minimal human supervision, AI can theoretically eliminate the human element.

AI systems employ advanced-machine-learning algorithms that can process information and learn on their own, adjusting trading strategies at lightning speed, all without human input.

How will AI transform investing?

"[O]ur Thematic Robot tool," BlackRock wrote last year, "blends human insight with the power of large language models and big data to build equity baskets with greater efficiency and breadth of exposures."

Such vague marketing-speak is still the norm, as we are barely scratching the surface of AI's capabilities.

Still, bearing in mind AI's potential benefits, everyone is gripped by FOLO -- the fear of losing out. One survey found that 9 out of 10 investment managers currently use AI in their trading processes or planned to.

And AI is having the same expansionary effect on markets as the railroads and the internet did in their day, as investors pour into the so-called Magnificent Seven companies and push stocks to new highs.

Who knows, maybe someday the machines will sign a Buttonwood Agreement of their own. Hopefully they'll still let us mere humans trade, too.

Kenneth G. Pringle, a journalist and historian, writes the Back Story feature for Barron's magazine. He can be reached at reports@wsj.com.

(END) Dow Jones Newswires

September 28, 2025 19:00 ET (23:00 GMT)

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