A History Of Technological Innovations - Part 1

The New York Central Railroad Company Stock Certificate

The New York Central Railroad Company Stock Certificate

“Through the years, technological innovations have improved our markets, including through increased competition, lower barriers to entry and decreased costs for market participants. Distributed ledger and other emerging technologies have the potential to further influence and improve the capital markets and the financial services industry. Businesses, especially smaller businesses without efficient access to traditional capital markets, can be aided by financial technology in raising capital to establish and finance their operations, thereby allowing them to be more competitive both domestically and globally. And these technological innovations can provide investors with new opportunities to offer support and capital to novel concepts and ideas."

- Jay Clayton, the Chairman of the U.S. Securities and Exchange Commission[1]

The future that Chairman Clayton laid out in before the United States Senate Committee on Banking, Housing, and Urban Affairs on February 6, 2018 is being built today. As Chairman Clayton makes clear this is not the first time in history that technological innovations have improved our financial markets and systems.

The transcontinental railroad across the United States is one such example. In 1860, the combined total of railroad stocks and bonds was $1.8 billion, increasing over the next 7 years to $10.6 billion. The innovation of bonds in the Congressional Railroad Acts generated the funding required to create the transcontinental railroad. This funding came from financiers throughout the Northeast, and from Europe, especially Britain[2]. The American financial system which came after this was based on those railroad bonds.

During this time there was an increase in Europeans investing in the United States Economy as it was developing for higher returns[3]. The British invested heavily in railroads around the world, but mostly within the United States, which totaled $3 billion by 1914[4].

As we enter the new gilded age, where the richest 1% are on target to own two-thirds of all wealth by 2030[5], there is a new opportunity to improve our systems. This is an era where rockets are landing themselves on floating barges, the cost to sequence DNA has dropped by orders of magnitude and the model of silicon valley continues to perpetuate. There are going to be countless more opportunities to support and drive future innovation around the world.

We believe that the next generation of great global innovations will be forged and financed with equity tokens.


[1] "Jay Clayton - Senate Banking Committee - Senate.gov." 25 Jan. 2018, https://www.banking.senate.gov/public/_cache/files/a5e72ac6-4f8a-473f-9c9c-e2894573d57d/BF62433A09A9B95A269A29E1FF13D2BA.clayton-testimony-2-6-18.pdf.

[2] "Patterns of American Railroad Finance, 1830-50 - jstor." http://www.jstor.org/stable/3111573.

[3] "The Industrial Economy: Crash Course US History #23 - YouTube." 25 Jul. 2013, https://www.youtube.com/watch?v=r6tRp-zRUJs.

[4] "Capital Movement and Transportation: Britain and American ... - Jstor." https://www.jstor.org/stable/2113694.

[1] "Richest 1% on target to own two-thirds of all wealth by 2030 | Business ...." 7 Apr. 2018, https://www.theguardian.com/business/2018/apr/07/global-inequality-tipping-point-2030