(CBS/AP) PORTLAND, Oregon - John J. Phelan Jr., the former New York Stock Exchange chairman credited with managing the chaos of the "Black Monday" market crash of 1987, died Saturday. He was 81.
The NYSE Euronext and Phelan's family confirmed his death Monday. The cause of death was not disclosed.
A former Marine who worked as trader for years before leading the exchange, Phelan was best known for keeping the markets open following the historic crash on Oct. 19, 1987. That day, stocks suffered what is still the largest single-day percentage drop, with the Dow Jones industrial average crashing nearly 23 percent.
It was considered Phelan's finest moment. Those who were there say panic gripped Wall Street as trading volumes soared, orders littered the floor and the Dow plunged. But Phelan worked with calm authority and resisted calls to close the exchange, which he knew would breed further panic. Later that day, he rang the closing bell himself, demonstrating leadership at a time when the eyes of the world were on the exchange.
"I think he went a long way in protecting us from a much worse situation," said James Rutledge, managing partner of Rutledge Securities Group, who was there for the crash.
The following day, pressure to close the market continued but Phelan walked the floor, cheering traders on. Meanwhile, he worked closely with the Federal Reserve to convince banks to keep credit lines open so trading could continue and pressure on the market would ease.
President Ronald Reagan later heralded Phelan and his staff's work in a letter that Phelan read aloud from the podium of the exchange. Many who were there say it was this kind of visible leadership that defined him.
Phelan was regarded as an intelligent and calm man who derived his authority from experience. Having worked at nearly every level, he was familiar with the market's innermost workings. As an official on the floor, people regularly sought him out because they saw him as a knowledgeable and fair resource.
He served as president from 1980 to 1984 and then as chairman from 1984 to 1990.
"He is one of the distinguished executives of the financial industry in the U.S.," Marshall Carter, deputy chairman of the board of NYSE Euronext, said.
Phelan was also widely considered a man who was not afraid of taking a bold stance when warranted, including modernizing a staid institution. He introduced computer technology to the exchange prior to the plunge, which some say helped handle the volume of orders that day.
He also pushed for further reforms after the crash, including supporting the adoption of so-called "circuit breakers," which halt trading during steep plunges and aim to prevent the kind of free-fall that took hold in 1987. He argued for greater coordination between equities and derivatives markets. And colleagues say he supported any moves to ensure that investors were investing, not just gambling, with their money.
"I think (his legacy) was having a very high sense of integrity and applying that within a business context, which was unusual at the time and continues to be unusual today," said his son Peter Phelan.
In addition to his work at the NYSE, he served on the board of a number of major companies including Merrill Lynch & Co. And he was very active in charitable activities, most notably as Chairman at the Catholic Charities Board of Trustees.
The New York native is survived by his wife Joyce and three sons John, Peter and David.