Drop Dead City (2024)

[bunniefuu]

I got speed.

-[vehicle engine rumbling]

-Got it?

Speed.

[horn honking]

Surely a significant portion of

the middle class

has fled New York City

and moved to the suburbs,

thus erade--

Tell me when. I got speed, Al?

Surely a significant portion of

New York's middle class

has fled the city and

moved to the suburbs

and thus eroded the tax base.

But that's nothing

really very new.

It's happened in a lot

of big cities.

But there are some

significant factors

that do explain New York's

present crisis.

-[horns honking]

-[people shouting]

[woman] You ain't goin' nowhere.

[indistinct conversations]

[male reporter] Believe it

or not folks, it's happening,

Mayor Beame is responsible

for the closing down

of this firehouse.

[boy] I think that's not fair.

Why should people get laid off?

[man] Well, the mayor says there

isn't enough money to pay 'em.

Well, I don't care what he says,

he's just a dumb, old bum.

[upbeat music]

Yeah, there's a lot involved!

My f*cking life is involved!

My life is involved here!

[horns honking]

[crowd chanting]

In 1975, the City of New York

was fundamentally bankrupt.

[man]

Who's gonna pick up the garbage?

[man 2] That's the city's

problem. The city wants to

satisfy everybody?

Give us our jobs back.

We'll pick up the garbage.

We're all good workers.

Every man on this job

is a hustler.

[people chanting]

[man 3] We didn't have

the money for payroll.

We didn't have the money

to pay our teachers.

We didn't have the money

to pay firemen,

or sanitation workers.

Even our police force.

[all chanting]

We want jobs! We want jobs!

[man 4] When Abe Beame

became Mayor,

we thought, "Hey, we're in.

You know, he, uh-- he

appreciates the cops

and he's gonna take

care of us",

et cetera, et cetera.

Ah, didn't work out that way.

It's a desperate time

for the men and women

who no longer have jobs.

[man 4] I don't think the Mayor

really thought through,

"I'll lay off tens of thousands

of people

and continue

just doing what I do."

I'm not talkin'.

-[interviewer] Did you hear--

-I'm not talkin'!

[indistinct chatter, shouting]

[crowd]

Those families should be free!

[interviewer 2] One gets the

feeling that there is not a lot

of faith in government today.

Why should there be faith in

government?

Government has let

the people down,

government has made promises

and broken 'em.

Government has failed to respond

to the citizen in the street.

[man 5]

A worker making $10,000 a year

is more important than a bank

that garners up

$400 million in profits!

-[crowd cheering]

-Money!

Money! Yeah, Money!

[crowd shouting]

[indistinct shouting]

[crowd shouting]

[music ends]

[lively music]

[man] I'll tell you my

relationship to Mayor Beame.

He was a neighbor of mine

in Bell Harbor, Queens.

Right off the beach.

He was well known, he had been

budget director.

I knew he wanted

to become Mayor.

And we'd stand for hours

taking in a little sun

and talking politics

and government.

Uh, I guess then I called him

"Abe", and I asked him,

"Abe, what do you think

about the future?"

He reached into his bathing suit

and he pulled out some tiny,

minuscule notes, written

in tiny handwriting.

He says, "This is my program."

And he starts reading to me

everything he would do as Mayor

to help the city economically.

[people screaming]

I said, "Abe, what if

you go in the water?

You lose the whole program!"

And he laughed and he said,

"No, I have it up here, too.

I have it in my mind."

[people screaming]

-[thunder rumbling]

-[vintage upbeat music]

[male reporter] When he

walked down the steps

of City Hall today,

it was clearly

Mayor Beame's day.

A day that he's worked for,

for the last 23 years

in city government.

Mayor Beame says that during

his administration he wants

to be a matchmaker,

wedding New Yorkers

to their city

so that once again

they'll be proud

to call themselves New Yorkers.

[man]

If you go to Central Casting,

casting for Mayor

of The City of New York,

and you had Abe Beame?

Come on.

He just didn't look the part,

he didn't act the part.

-Will be...

-[Charles] And, uh,

he was not an expressive

public speaker.

We intend to make

our administration

a model of honest government.

[volume goes up] We intend

to be open in our dealings.

[man 2] Abe Beame

came into City Hall

with this reputation

as a good man with figures.

He very quickly found out

that the city's debt

-was grossly understated.

-[continues indistinctly]

-He thought it was 2 billion.

-Finally...

[Fred] It was about 6.

We wanna earn the public respect

for our governmental

institutions

by showing that we can provide

high quality service

and that we can operate on

a fiscally responsible basis.

[man 3] It took a while

for him to accept

that the situation was

what it in fact was.

I remember he said to me

plaintively, "Jay,

let me ask you,

how did we get into this?"

[upbeat, funk music]

[Fred] Most of the money,

the money that the city

could play with,

came from selling

New York City bonds.

Offered this morning

is $324,900,000,

zero bonds, City of New York...

So all the banks

would get together

in a room and whack it up.

"I'll sell 2 billion worth."

"I'll sell a billion

and a half."

And for every one they sold,

they got a commission!

Lots of money.

They didn't-- You didn't even

have to know anything!

Good morning,

ladies and gentlemen,

today the City of New York

is offering

for competitive bidding sale

260 million Tax Anticipation

Notes...

-For which I...

-[Harrison] The banks competed

to buy these bonds and resell

them to the public.

And so bankers' representatives

would put their bids

into a little tin box,

and then I would go out and

ceremoniously remove them.

And we would go into my office

and compute

which one of their bids was

the best from the standpoint

of the City, and then we would

award the bond

to the successful institution.

-Jay, can you hear us?

-[Jay over the phone]

Yes, I do.

I wish to announce

that the City

is accepting a bid submitted

on a competitive basis

at auction

by a syndicate headed

by Chase Manhattan Bank.

The interest rate is 7.69.

Thank you very much.

[music ends]

[man] If you do have any people

that are interested in them,

I think you can tell them

they'll be better than a seven.

Yes, sir. Will do.

Mr. Kupferman...

-[soft thud]

-I certainly will.

[man]

Municipal bonds were considered

the safest of investments.

And back then, the city

was run for people

who lived here,

really did live here.

Mrs. Resnick, uh, I understand

you own some bonds.

-Is that right?

-Yes, I do.

Why did you buy them?

Well, I'm sending a son--

a son to college,

and I thought, the money

that I would get--

the interest I would get on

the money would help me

defray the cost of the college.

What about yourself? Are you

depending on that money to live?

Absolutely, this is all I have

in this world,

and I've gotta have that money.

Mrs. Kessler, I understand you

hold some New York City bonds.

What were you gonna

use the money for?

Well, I do want it to--

for the both of us

for retirement purposes.

Maybe we wouldn't just

have to live on the dregs.

Maybe with our municipal bonds,

we would be able to,

well, live a little bit

more comfortably.

[interviewer] Mr. Kessler, would

you like to say anything?

[chuckles softly] Not really.

I think my wife

has said everything.

[Mrs. Kessler] We certainly

don't have too many luxuries

after all these years of living.

[upbeat, dramatic music]

[man] The years leading up

to the financial crisis

were a time of great optimism

in New York City.

Optimism about the power of

government

to do all of the things

that need doing.

[music continues]

[man 2] This city was

spending money based

on a liberal philosophy of

helping people live better.

This city, for a very,

very long time,

gave a real opportunity

to people that

came in and had nothing.

And they were given that chance.

At 10:15 DE2 is closed.

[woman] The City of New York

was the only place

in the United States that

provided a university system

and a community college system

that was absolutely free.

It was a pillar of opportunity.

[Harrison] My own father came

to this country at age 15,

not speaking a word of English.

Uh, he was the beneficiary

of a free education

at the City College of New York.

That was the spirit of New York.

[man 3]

The city was progressive.

And I came to New York

because I thought

the things I believed in

could be much better

accomplished here.

My work was

a realization of the idea

that I could deliver

universal health care.

That I could do wonderful care

for the people

that was essentially free.

And the fact that we were

opening neighborhood

family care centers

was a great part

of the progress.

You may bring your child in

at eight in the morning

and we close at six.

There was a great deal of caring

for people who had been left out

and hadn't been cared for.

It was very idealistic

and very exciting.

You can look at the history

of New York, and in a way,

it's always been divided

into the Big City

and the Little City.

You know, the Big City, that's

the capital of banking

and real estate

and all these things.

And the Little City,

you know, the thousand

individual neighborhoods

that are really the core of it.

[bike bell ringing]

[woman]

I came to New York in late '60s,

and there was never any doubt in

my mind that I wanted

to be in Harlem.

I loved being up there because

it was vibrant,

it was alive

and it was coherent.

[upbeat, latin-rhythms music]

People felt free

and comfortable.

[singing in foreign language]

[man] I grew up in a mixed

neighborhood,

which was cool,

you know,

there were Puerto Ricans,

there were blacks,

there were Greeks,

there was Italians,

there was Jews.

When we first moved there,

we were the first

Puerto Rican family

out of 23 apartments.

But being in New York,

I had a sense of belonging.

[music increases]

I mean, the young Puerto Ricans

took over the Park!

You could hear the music going

from one end to the other.

It was incredible.

[music fades]

[Anthony] The city had always

been interested

in providing not only

a wide range of public services,

but liberal compensation

for the workforce of the city.

[man]

The city had a public sector

with hundreds of thousands

of employees,

and contracts negotiated

over the years provided them

with good wages

and, um-- and good benefits.

Pensions, health insurance,

vacations, things like that.

All through the--

the '50s, '60s,

certainly into the '70s,

the labor unions

were all-powerful.

[cheering]

During that time,

a fellow named

Victor Gotbaum

was extraordinarily powerful.

[reporter] It's often said

that it was the great

giveaway era for the unions.

You're smiling.

Is-- Is that the case?

Because that's a regular ha-ha,

you know...

[Anthony] This was a union town,

a blue collar town,

I believe Victor Gotbaum

represented 100,000 employees.

And then the uniformed forces

were all represented by unions.

The New York City

Department of Sanitation

was represented by a union.

Albert Shanker led

the teachers' union.

All of the construction jobs

were represented by unions.

I mean, most of the people

who lived and worked

in New York were union members.

[man] The workforce of the city,

and I'm talking about

middle class,

average paycheck folks

all did very well.

You could buy a house

in Brooklyn or Queens,

your kids could go

to a good school,

you could retire.

It was a pretty good life.

[children shouting]

[man]

Did I like the idea that we were

putting people through college?

Did I like the idea

that the unions

were being paid a lot of money?

Yes, I did. I'm a liberal.

So, I thought it was great.

[indistinct clamoring]

[man]

The liberal spirit at that time

was not just consigned

to Democrats

because everybody that lived

in the city benefited from it.

They're gonna come

to New York City,

the greatest city

in this nation!

[crowd cheering]

We were doing our best

to do the right thing...

...and it imploded on us.

[music fades]

[Harrison] When I became

comptroller in 1974,

I made a pledge

that I would conduct

the first independent audits

of New York City's finances.

Well, as we started

to roll up our sleeves,

the chief accountant said to me,

"You know, Mr. Goldin,

every month

the city gets back the

canceled checks from the bank,

there's a closet filled

with these canceled checks

that have never been reconciled

to the city's books.

So, nobody has ever

undertaken to see

whether what the banks say

the city has in cash

is what the city's own books

have in cash."

That was just the beginning.

[intriguing, upbeat music]

They didn't have an accounting

system that made any sense.

-[man] It was chaotic.

-It was chaotic.

Everybody had stuff in drawers,

everybody had buried--

buried stuff,

and...

There's gotta be a good "and"

to some of this.

There were no f*cking books!

[music continues]

You wanna talk to me,

I'll talk to you.

Don't make a-- don't make

a circus out of it, will ya?

We wanna ask a question

that involves

-both of you and Mr. Goldin.

-[Beame] Yeah.

The fact that Mr. Goldin had a--

had a different estimate

of the budget deficit

than you did...

Our Budget Bureau has indicated

that their figures are correct

and that's what they're--

they're standing by.

Well, I wish I were incorrect,

but unfortunately, I think

the Bureau of the Budget

has been too optimistic.

[Eugene] This disagreement

got the attention

of the senior bankers

and they started

asking questions

about additional risk.

As a result, interest rates

on the city debt

started going up quite sharply.

[reporter]

Did Mr. Goldin hurt the city?

Well, I just, uh, put it my way

that, uh,

I think it had an effect.

Well, I think that's

akin to, uh, the patient

saying that the doctor

has caused the illness.

[Harrison] I was an

independently elected

comptroller,

so Mayor Beame was not my boss.

And there was a big age

difference between us.

Uh, he was much older than I

and had a right to think of me

as, uh--

as a kid, which he did.

On top of that, Mayor Beame

had been comptroller

and was in a sense defensive

about what he had left behind.

Mayor, couple of weeks ago,

you didn't wanna

characterize Mr. Goldin's

motives at that time.

You were almost kind...

-...toward it, I--

-[Beame] Nor do I now.

[reporter]

Well, excepting the--

the w*r between you two

has heated up considerably

the last two weeks.

I just said to you,

and I just made the observation

that I am continuing

to do the job that I was

elected to as Mayor.

And the only time

I will say anything

with respect to my

former stewardship,

the comptroller's office,

will be when I want to correct

the record and the facts.

[upbeat jazz music]

[Fred] Abe Beame's background

was Brooklyn clubhouse politics.

That meant people

would come in and say,

"I'm having trouble

with my rent.

I need some turkeys

for Thanksgiving."

And you took care of

all those little things.

That's the milieu

in which Abe Beame lived.

[woman]

I-- I want to know, though,

is it proper for me to discuss

certain items

that would relate

to spending money

for community improvement

in the area now,

before you as members of the

-board of estimates?

-[Beame] You might as well

mention it.

[Fred]

Because the city was so big,

there was always money

coming in and going out.

And so you could promise,

"If it was gonna be a good year,

that thing that you wanted

there in Brooklyn,

we can build that."

There's a common cry

at this all day grousing

for better schools,

better hospital facilities,

better roads, better parks,

better libraries.

And there's a common answer

from the Mayor

and his men up there

on the platform.

It's basically,

"Sorry, we'd like to help,

but we just haven't

got the cash."

[dramatic music]

[man] We really are in trouble.

The present operating budget,

which was

balanced on July 1st,

is now $400 million down.

[interviewer] How--

How does that get remedied?

Well, first of all, the--

the way we can remedy it wo--

would be with new taxes,

which the Mayor ruled out.

He didn't say forever,

but he ruled out

at the present time,

and the other way

would be to cut the

operating expenses

of the city right now.

[music intensifying]

[female reporter] Mr. Beame,

you said that you get along

with the construction workers

yet Tom Tobin said that this

used to be a union town.

How do you react to that?

Well,

you know, you get carried

away at times.

This is a union town,

it's always gonna remain one.

[crowd shouting]

[crowd chanting]

[indistinct chattering]

[indistinct clamoring]

[man] Mayor Beame

has $29 million allocated

for construction

he's holding back.

You people are the ones

that can find out for us

where that 29 million is.

[reporter]

We'll give it our best effort.

We know you will, sweetheart,

and thanks very much.

[music continues]

[Stephen]

The costs for the labor force

in New York City

were overwhelming.

I mean, in the decade before

the sh*t hit the fan,

from '63 to '73,

the cost of

New York City government

grew three and a half times.

That is a big pile of dollars.

And that would have

never happened

without the help

of Nelson Rockefeller,

who was Governor of the

State of New York forever.

[audience applauding]

[man] Nelson Rockefeller was

an ambitious governor.

He spent a lot of money,

liked to build things,

liked to do things,

and it wasn't

always paid for

[chuckling]

as well as one would like.

Adoption of a universal health

insurance program...

Further improvement

of public transportation

and other community services...

Major expansion of housing

and urban development...

Let us continue

to maintain New York

as a model to the nation

of what creative,

responsible state government

can achieve for the people.

I thank you very much indeed.

Best of luck.

[audience applauding]

[Kevin] All throughout the '60s

Nelson Rockefeller was the face

of northeastern

liberal Republicanism,

something that doesn't

really exist anymore.

He-- Here was a man who was

a big cold warrior,

wanted to increase the military,

uh, but was also

for public spending

on education, civil rights,

health care,

cultural institutions...

I mean, almost single-handedly,

he built 80,000 units

of affordable housing.

For Rockefeller,

this was not extravagance,

this was civilization.

[intriguing, classical music]

[Fred] New York loved him,

absolutely loved him.

He could be relied upon

to be honest and straight,

mainly because he was rich

and he didn't have to steal.

But he was the Godfather

of the fiscal nightmare

of New York City.

[indistinct chatter]

[Ira] Whenever they got

into fiscal difficulty,

the city would call

on the Governor

to help approve

another type of tricky bond

like tax originating bonds

or tax anticipation bonds

all of which were "hoopy doopy"

to raise money with

no real assets behind it.

[Kevin] Tax Anticipation Notes.

"There's gonna

be a tax, trust us."

Bond Anticipation Notes.

"For this bond, we're gonna

issue another bond."

You know--

Finally, Moral Obligation Bonds.

"Don't worry, the State

won't let itself go bankrupt.

You know, it's-- Trust us."

[music fading]

[Jim] In late '73,

Rockefeller stepped down

as Governor.

One of the people

running to replace him

was Congressman Hugh Carey.

He was

a complicated personality.

He had been

in the Congress 14 years

so he was

a real Washington insider.

But like Mayor Beame, he was

from Brooklyn, New York.

So he knew his way around

the politics of New York City.

[Hugh] Because Brooklyn

gave me a chance,

the kind of opportunity

that I want

for every young man,

woman and child

in this great city

and in this great state.

[woman] Nobody expected him

to get the nomination,

let alone

win a general election.

But it was a Watergate year

in 1974.

People of the

State of New York...

...wanted to sweep

with a clean broom

and the one they swept in

was Hugh Carey.

[gentle, thoughtful music]

I was assigned

in my baby reporter days

to travel on the bus

that took

his family up to Albany.

Nelson Rockefeller

never spent a night in Albany.

He had his own plane and he

would fly home every night.

Hugh Carey and his family

were moving in

to the Governor's Mansion.

[female reporter]

When we visited the Carey family

they were in the midst

of making a specialty

of the Carey household, oeuf

avec chapeau , eggs with a hat.

It's always at this point that

someone hides the spatula.

-Oh, of course--

-[woman chuckles]

[Linda] He had had 11 children.

Two had died.

His wife had died.

He was a widower.

It was really

quite a touching story.

[Jim]

Hugh Carey, like all of the

smart politicians in New York,

knew that there had been

a long time deferral

of fiscal reality in the State

and that the legislature

was always moving

the target forward

for the next guy.

So there was an atmosphere

of fiscal crisis

from the day

that Carey was sworn in.

-So help me God.

-[audience applauding]

[applauses and music fading]

[upbeat, jazz music]

[music intensifying]

[Ira] It was a young lawyer

at White & Case

who blew the whistle.

-[music fades]

-He was

representing one of the

banks on a new loan

to the city,

and he went down to City Hall

and asked the question.

[man] In early 1975, I was 29

and I went up and I met with

the assistant comptroller,

and I asked him a question which

he said no one had ever...

...asked before. And I said,

"You know, you're issuing

tax anticipation notes.

What taxes do you

anticipate receiving?"

And he actually wrote out

some information for me

on a yellow legal pad.

And I looked at it and I said,

"Goodness, I don't think

they have the room...

...to back this issuance.

'Cause if you don't

anticipate receiving taxes

because you've

collected them already,

you can't issue

a tax anticipation note."

Well, pretty quickly

the show kinda collapsed.

The announcement on behalf of

the Comptroller is that the

offer which we had

expected to receive

and announce

at 2 o'clock this afternoon...

...is now expected at 4 o'clock.

[reporter] Does this mean that

nobody wants those bonds?

We will be making

a further announcement

at 4 o'clock

and anything before--

[Harrison]

That day, nobody showed up.

And we had a box,

and it was there,

and the door was open,

and the appointed time came

and nobody showed up.

Nobody wanted to buy the bonds.

That was not good.

[Ira] The emperor

has no clothes, right?

And it was a lawyer

representing a bank

who blew the whistle.

Where was everybody else?

You know?

Where was Albany?

Where was everybody else

who's supposed to be watching

the fiscal affairs

of the City of New York?

[male reporter]

The three northbound lanes

of the Westside Highway

collapsed under the weight

of a heavily loaded asphalt

truck late this afternoon

and some 50 tons

of hot asphalt

spilled over

the service road below.

[man] We're in a recession,

we're in deep budgetary trouble,

and then we get

a third complication

which is that

the banks wouldn't lend

to the city short term anymore.

[reporter] You said that

the banks make

Jesse James

look like an amateur.

What would you do

with the banks?

I-- If the banks

would not respond

and treat us as--

for what we are,

an institution that has

the welfare of 8 million people

to be concerned about,

-and unless they recognize

-[music intensifying]

their obligation

to the public,

then we have to begin to talk

about nationalizing.

[Alan] There was a meeting

between the union leadership,

the City, and the bankers

as to what the banks would be

ultimately willing to do.

And the banks

distributed a document,

it was about

three quarters of an inch thick,

[chuckles]

with the terms and conditions

under which the banks

would assist the City.

I was at that meeting

looking at Abe Beame

and he was getting

red in the face...

...in a rage.

He understood that what was

being presented to him

was a coup d' etat by the banks.

He said, "I would rather have

the City go into bankruptcy

then to turn over the governance

of this city to you guys."

[strong, dramatic music]

Basically, they told them to go

f*ck themselves.

You don't own me

I'm not just

One of your many toys

You don't own me

Don't say

I can't go with other boys

[Michael] This is something that

the city brought upon itself

with the connivance

of its bankers, let it be said.

You know, what tends

to be forgotten

is that for every bad

borrower...

...there's usually

a stupid lender.

[Richard]

Citibank was the largest bank,

and the chairman,

Walter Wriston,

was a very conservative guy

who thought, you know,

all the politicians in New York

had been irresponsible fiscally.

We used to laugh about it.

But then I'd say, "You're

absolutely right,

but why the hell did you

lend them money?"

- You don't own me

-[chuckles]

Excuse me, could I talk to you

for a moment?

I'm trying to buy, uh, a--

a bus ticket over

at Port Authority.

I have $14. I'm just trying to

get together two more dollars.

A half a dollar, even.

-I don't have any bread--

-A quarter?

[female reporter] New York City

is supposed to be down

and out but its beggars have

never had it so good.

At least those who go to

Omar's School for Beggars.

Omar lost his executive job

in New York a few years back.

At 45, he was

on the verge of suicide

when a good Samaritan

heard his hard luck story

and gave him 20 bucks.

Now, wearing a disguise

to protect his identity,

Omar teaches others.

[Omar] Remember you got

2, 3, 4, 5 seconds, that's all.

Get up to the guy,

touch him on the sleeve,

make your pitch, be polite, say,

"Pardon me, sir, thank you..."

[man]

As Omar, I tried to explain

that in countries like Sweden

and Norway,

you're taken care of.

And I just felt that people

in our country should be

taken care of.

And I'm doing--

Taking care of them

with Omar the Beggar,

teaching them

how to beg for money.

[Omar] The point is, you're not

going to some guy and saying,

"Give me 100 bucks."

You're saying,

"Give me 2, 3, 4, 5 dollars."

That's all you're asking for,

'cause this is what

professional panhandling

is all about.

[lively, playful music]

[man] Mayor Beame

came to see the Governor.

I'm the new young

budget director

of the State of New York,

and I know roughly

what's going on, only roughly.

The Mayor says, "Governor,

we have $800 million of notes

coming due in 10 days

and we have no way to meet it."

The Governor and I

lean forward--

I mean, we knew they

were having troubles

and there was a budget problem.

They have $800 million coming

due and no way to meet it?

And they tell us 10 days before?

[man 2]

Abe Beame comes up to Albany

with two or three pages.

On each page there were like,

one or two sentences.

That was the whole presentation.

He didn't have a full-fledged

professional presentation

of what their problem was?

[Peter] So we all got to work.

They eventually

put together the picture.

We estimated that the real

budget gap of New York City

was 4 or 5 billion.

That turned out

to be very close.

Turned out to be 6.

[music fades]

New York's financial situation

has grown increasingly serious

in these days

of inflation and recession.

The city is spending more,

but taking in less.

New York Governor Hugh Carey

said the state

will advance $200 million

to pay one city bill

due tomorrow.

That will help, but it's a long

way from solving

the city's problems.

[intriguing music]

[Stephen] And everybody

was tearing their hair out,

how terrible this is,

all this money...

And I said, you know,

"This is the small one."

I said, "Come this summer,

we're gonna be dealing

with the bankruptcy of the

City of New York."

The room got violently quiet.

Carey took his glasses off,

threw 'em on the table

and said, "I never wanna hear

about that again."

And he didn't talk to me

for four months.

[music increasing]

[water splashing]

[music fades]

[soft music]

[siren wailing in distance]

[music continues]

[man] You know,

I came here back in 1970.

Someone said, "Why are you

coming back to New York?"

I said, "Well, because

it's a great city

and it's worth saving."

I'll never forget, he said,

"Yeah, that's what they said

about the dinosaurs."

[music continues]

[man 2] When I was a child,

we didn't have the playgrounds

like the kids have today.

So our playground

was the streets.

Everybody knew each other.

You know, it wasn't

like today, you know,

the hipsters

and stuff like that.

Back then,

you knew people

in the neighborhood

ten blocks away.

You had a lot of factories,

a lot of good jobs,

and there was a bar,

or two bars on every block,

you know, for people after work.

But back in the '70s,

it started falling apart.

Buildings becoming abandoned,

and little by little,

it started eroding

and deteriorating, b--

you know,

the whole neighborhood.

You would see a lot

abandoned buildings.

They weren't even blocked up

with cement blocks, or whatever.

And that was going on

all over the city.

[train horn honking]

[Judah] From the late '50s

to the early '70s,

the population

of the City of New York

remained the same

at eight million.

But during that time

one million whites

essential to our tax base

moved to the suburbs.

And they were replaced

by about the same number

of African-Americans,

as well as Hispanics

from the Islands.

It was not easy to get a job,

and a lot of people

were suffering.

I mean, we had

no heat last year,

no hot water,

no nothing.

[reporter] Have you been able

to get any help

from the city or anybody?

The city? What is the city

gonna do for me here?

[indistinct chattering]

[Kevin]

People coming to New York

were in many ways

the same people

who had always come

to New York.

The poor, the striving,

new Americans,

all of them

looking for opportunity.

But the jobs weren't there.

[music continues]

[Michael] When I was a kid

growing up

in New York right after the w*r,

New York was the largest

manufacturing city

in the United States.

Everything from belt buckles

to hats, to-- you name it.

But by 1975, 30 years later,

that was no longer the case.

[man] Originally,

when I came here, uh,

it was all industrial on both

sides of the street.

In the last couple of years,

buildings have been

deteriorating

and landlords

don't wanna fix anything,

so everybody's been moving out.

[music continues]

[woman]

Business in Crosby is lousy!

And everybody else around.

[Judah]

There was a tremendous amount

of uncharted territory

if the leading city

in the country

would go bankrupt.

It's to be avoided...

...at all costs.

[music fades]

[male reporter] Mr. Comptroller,

how would you characterize

the city's financial status

right now?

Well, this city, uh, continues

to have, uh, enormous reservoirs

of financial strength.

[Peter] In fact, they could stop

all the debt service payments

and they didn't have

enough money to run the city.

Even if we got the labor unions

to take cuts,

even if we got the banks

to take a stretch-out,

even if we cut the budget,

it was clear that we couldn't

get out without help

from the Feds.

So Governor Carey

and Mayor Beame

went to Washington.

[heroic, dramatic music]

[Jim] In May of 1975,

Gerald Ford

had only been President

for eight months.

Can't Bob

go to the one luncheon,

and then I drop by

over there afterwards?

He was sworn in

when Nixon resigned.

Let's do it that way.

He in turn appointed

Nelson Rockefeller,

who was out of a job at the

time, to be Vice-President.

[reporter] What does the

Vice-President Designate

do with himself all day?

Well, review all of the things

you've done all your life,

uh, all the decisions

you've made.

Uh, be sure that you can

answer questions

as to why and when,

and I guess there are

some questions

that will be raised

about finances.

[Jim] Rockefeller represented

the Eastern Establishment

of the Republican Party.

But the people running

the Gerald Ford administration

were Donald Rumsfeld

and d*ck Cheney.

The Dynamic Duo.

On any given day,

we didn't know which one

was Batman

and which one was Robin.

-Where's Terry? Inside?

-He's in there.

They were young

Midwestern conservatives.

[indistinct chatter]

[Jim] They detested

Nelson Rockefeller,

and they didn't think much of

doing anything for New York.

[lively, dramatic music]

One thing I will never forget

is our first meeting

in the White House.

Gerald Ford and Hugh Carey

had served together

in the House of Representatives

for 20 years.

They'd swapped votes,

stories and beers.

And who's on the

opposite side of the table?

It's Nelson Rockefeller.

Ford says, "Can you shed

any light on how the City

could get

into this much trouble?"

The response comes,

[imitating Rockefeller]

"Mr. President,

I find it almost inconceivable

how these people could have

gotten into so much trouble."

[in normal voice] Then he turns

to the guy next to him.

He says, "What about you, Bill?"

Bill Simon,

presently

Secretary of the Treasury

and a former New York City

municipal bond salesman.

He had been chairman

of Comptroller Beame's

Debt Advisory Committee.

The rest of us think

we're in the funhouse.

So Simon tells Ford,

"When I last knew anything

about City finances,

they were in good shape."

And there's Beame

just sitting there.

[music ends]

[man] I don't think

it was always clear

who had Ford's ear.

But over at the

Treasury Department,

Bill Simon felt very strongly

that New York

had gotten itself in trouble

through its profligate spending

and that the only way

to stop it was to be tough.

I can only hope

that the travails

of New York City will have some

impact on our attitudes

as to the proper role of

government in our society.

We have to, in the

Federal Government,

accelerate a comprehensive

reexamination

of all Federal, State

and local relationships.

We have to determine

whether the priorities,

practices

and procedures of the past

in all areas, welfare, housing,

all assistance programs

such as rent control...

I know I'll be ripped on that

suggestion tomorrow morning

in the newspapers

back home, uh...

But that's too bad.

[intriguing music]

[Kevin] Supposedly, New York

gave out so much money

to the poor, particularly

to welfare recipients,

that people were flocking

to New York to get it.

And of course, this is nonsense.

I mean, New York's welfare

payments, like everybody else's,

were determined within certain

parameters set by the Feds.

[reporter]

A Welfare Center in Harlem.

There are now a million people

on welfare in New York.

And as the

national recession worsens,

an extra 12,000 New Yorkers

sign on every month.

[Kevin]

New York City had no ability

to turn people away if they

qualified for welfare.

Paul Robinson!

[Kevin]

And here you had William Simon

who'd been a New York bond guy,

a millionaire,

making it this morality play.

What were they supposed to do?

Pay the policemen or send out

the welfare checks?

There's not enough money.

[Richard] There was a story in

the newspaper that Paul Volcker

was named President of the

New York Federal Reserve Bank.

I knew that the Fed had the

power to make emergency loans

to municipalities,

so I figured

it was a good thing

to get in touch with him.

[Paul chuckles]

It was a long time ago,

but d*ck Ravitch

and Peter Goldmark

came to visit me

and said,

"Okay, you're the President

of the Federal Reserve Bank

of New York

and New York is going bust, what

advice do you have for us?

And what are you gonna do?"

And I said-- I told him,

"Well, the Federal Reserve

isn't gonna lend you

any money. [chuckles]

You're on your own!"

-[machine clicking]

-[people chattering]

[Eugene] If it got to the point

where the city could not borrow

an additional nickel

at any price,

no matter

what the interest rate,

it would have real trouble

paying the salaries

of the municipal employees.

Week after week, we were

in exactly the position

of the small business owner

who has a payroll to meet

and does not have cash

in the cash register.

At the moment, New York City

doesn't have the money

in hand to get

through next week.

Public School 79 didn't get

its monthly truckload

of canned vegetables today.

The canned vegetable wholesaler

says he's not delivering anymore

unless he gets paid cash.

And the city is $5 million

behind in its milk bills.

[Harrison]

I was really concerned.

I remember

I got my first chest pains.

I got a pain, I remember lying

down on the couch in my office.

We needed credit,

and there was

one thing left to do

that would reassure the banks.

[soft rock playing]

That's how I feel

Oh, that's how I feel

[Alan] Once we got past

understanding that

this was real,

the question is,

"What was the solution?"

And it certainly

was not layoffs.

From our point of view,

it wasn't layoffs.

[Victor] Once again,

we're asked to sacrifice,

while there is absolutely

no sacrifice,

absolutely no sacrifice,

asking corporations

such as Citicorp,

whose profit margins

have gone up almost 100%.

[distant shouting]

We are here,

my brothers and sisters,

to demonstrate

that banks

cannot put themselves

above the people

of the City of New York.

[crowd cheering]

Let me say this to Mr. Wriston

who I'm now told has locked

his employees in there.

They can't even

get out for lunch...

[crowd shouting]

Let me say,

we are asking

First National City Bank,

come out of the closet

and communicate!

[crowd cheering]

[man]

What I have to say is gonna be

very short and very sweet.

If it's up to the Patrolmen's

Benevolence Association,

they won't have $400 million

profit next year

because they're not going to

have it on the backs of cops!

-That's the way we feel.

-[crowd cheering]

[man 2] When they're talking

about laying off cops,

we were laughing. We said,

"What, are you kidding me?"

Never happened in the history

of New York City

Police Department.

Never, they never laid off cops.

You know,

I-- In a million years.

There's a man chasing a guy

who just picked his wallet,

about two blocks up.

[Wilton] There were precincts,

for instance,

the 75 precinct,

they were doing...

...almost a homicide a day.

Somebody was getting k*lled

in that precinct

every single day.

[reporter] Just why the sh**ting

began is still a mystery.

But the g*nman

and his first victim,

who may have been able to shed

some light on it, are dead.

So is the Good Samaritan,

another victim

of the senseless violence

that's part

of New York street lore.

[man] At Channel 5,

the sense of fear

was very great.

The anchorman...

...had a g*n.

The news director had a g*n.

Most of the reporters had g*ns.

I was the only one who didn't...

...that I know of.

I had this vision of everybody

sh**ting everybody else.

It was, uh, a strange time.

[grandiose, dramatic music]

[narrator]

Crimes such as mugging depend

on the criminal's opportunity

to be alone with his victim.

You can deny him this

opportunity by remaining alert

in potentially

dangerous situations.

Look around you.

Make sure

you are not being followed.

If you suspect you are,

one possible strategy

is to stop

at a lighted storefront

and wait to see

if the suspect passes you by.

If he stops too,

then you have some evidence

that you have been singled out

as the target for a crime.

[Eugene]

The uniformed forces said, uh,

"Look, imagine

this city is chock-full of crime

to begin with, imagine

what it's gonna be like if you--

if you don't have cops

or firefighters on the street.

[siren wailing]

[man] I was with Ladder 120, uh,

in Brownsville,

and we were the

busiest company in the world.

In the world.

We were doing like

10,000 runs a year,

maybe 30 times a night.

[sirens wailing]

There were times, I can

remember one in particular,

that we turned into a street,

I jumped off and I ran in

to start cutting

the roof open,

and I hear

the lieutenant calling me,

He's going,

"Flip, where are you?"

I've got this thing, it's-- it's

blowing 20 foot in the air.

And I looked, they were fighting

a building across the street.

I was on a total

separate fire by myself.

[suspenseful, jazz music]

What type of people

go into arson?

[man] I would say they're

all kinds of people,

businessmen,

kids,

family men,

and women.

[Flip] They were basically

burning Brooklyn down.

Whether it was Gas Can Harry

or for insurance purposes.

I mean, how could

they lay off firemen?

How could that possibly happen?

[Kevin] Firefighters

were literally dealing

with this apocalypse.

There were fires everywhere.

And William Simon

or a Walter Wriston

was telling them they were--

they were making too much money.

"Good luck!

You go put out the fire!

[chuckles] You go keep the city

from burning down!"

This is complete madness again.

People are gonna die.

More people are gonna die.

And the public has to

now be aroused

by this move by our Mayor.

[music turns upbeat]

[news reporter] Some people

once called New York, Fun City.

Now the police and firemen's

unions of New York

are calling it Fear City.

Travelers arriving at New York's

Kennedy Airport today

were handed pamphlets by

off-duty police and firemen.

The pamphlet says

the city is so unsafe

that visitors should stay home.

[Fred] "Stay off the streets

after 6 PM.

Muggings and occasional murders

are on the increase."

I'm sta-- I'm starting to read

this and it's bothering me...

So-- but I'll continue, I mean,

it's bothering me

that this was on at the time.

But let me finish it.

"Avoid public transportation.

You should never ride the subway

for any reason whatsoever."

It will continue until

we're served. It's that simple.

We're gonna continue with

this campaign for 18 days.

[continues indistinctly]

Come on! I grew up on the

Lower East Side, it's bullshit!

I mean come on,

what do you think?

I'm gonna panic over this?

I'm gonna get diapers?

I mean, come on!

Have you heard of the

Fear City campaign?

-Of the what?

-[reporter] The police--

-The Fear City campaign?

-No.

[reporter] The police say that

a lot of them are being fired

and New York is not safe.

How do you feel about that?

Well, I've seen a lot of them

around and I haven't seen, uh,

any purses

snatched or anything else.

Are you aware of the

Fear City campaign?

No, sir, I'm not,

I just arrived in New York

and I'm not aware of it.

Have you heard of the

Fear City campaign?

Oh, yes, I have.

[reporter] What's your reaction?

I think it's, uh, overstated.

I'm not personally afraid of it.

[Fred] "Do not leave valuables

in your hotel room.

And do not

deposit them in the hotel vault.

Hotel robberies have become

virtually uncontrollable."

[reporter 2] The Mayor says

you're-- you're inciting panic.

W-- The Mayor should read

what we wrote, uh...

If-- In fact, if you read it

yourself you'll find out

that everything

that's written in there

is either, uh,

statistical, uh, data

from-- that we've gleaned

from the Fire Department

or the Police Department,

or things that

we've taken directly out

of the New York City newspapers.

Well, frankly I had forgotten...

...that, uh--

that this was

the posture of the, uh--

the PBA.

How can people

who claim to love our city

speak of it in this fashion?

I think it is disgraceful.

[music fades]

[soft, folk music]

Well, there's

All kinds of cities

That I've rambled around

But New York, New York

Now there's

A hell of a town

You know, it ain't no lie

And it ain't no guff

They got five big boroughs

Chock full of stuff

They got skyscrapers

Subways

And sea of humanity

Sure, I know New York

Is dirty and ugly

And full of c*ck

And gonorrhea

And rats and junkies

And hookers

-And rude cab drivers

-[horn honking]

Bad air and bad vibes

And unemployment and...

Oh, but it's not boring

New York City's

big financial problems

have moved out of the

government's accounting offices

and into the streets.

The municipal treasury

is so bare

that the city began

its new fiscal year yesterday

by laying off

thousands of workers.

[Anthony] I was a supervisor

when the layoffs

went into effect

I remember

a group of men came in,

I gave them their orders and

everybody just went outside

and did nothing.

More than

2000 sanitation workers

were laid off.

[indistinct chattering]

Then a lot of the men

who were not laid off

decided to support

their colleagues.

So, there was a strike.

[upbeat, funk music]

[reporter] The top of the news

this morning,

the Big Apple

turning a bit sour.

Garbage men on strike

in New York City,

a wildcat strike

that began yesterday

and until it ends, over

25,000 tons of garbage a day

will pile up.

I've been living here since 1929

I ain't never seen

nothing as ridiculous as this.

Personally do you feel anything

that you can do

as a person?

I don't think there is much

that I can do as

a person I mean,

perhaps I could write

a protest letter

to the New York Times.

[man] I love picking up garbage,

that's my money.

What do you think I throw things

in the street for?

-'Cause I'll have

a job tomorrow.

-[men chuckle]

If I don't pick it up and throw

it in the street,

I won't have a job tomorrow!

-What, are you kidding?

-[men clapping]

And I want Mayor Beame

to know, Friday,

I'm coming to his house

with my two kids,

make sure they feed 'em.

[man 2] I think it's a terrible

time to have a strike

because it's too hot and it's

really a health hazard.

So, uh,

Mayor Beame

should get on the ball.

Or get on the beam.

[music increases]

Lay off 2,300 firefighters

in New York City?

Richard Vizini,

head of the Fire Union,

says there'll be money

made out of that.

The money, he says, will be made

by the undertakers.

The people that are gonna be

greatly affected by it

are the people in the

disadvantaged areas,

the people in the ghetto areas.

[reporter] 5,000 police officers

were dismissed by the city.

They were ordered to turn in

their badges and g*ns.

The unions are attempting to

force the city to reinstate

the 19,000 municipal employees.

And the city says

it simply doesn't

have the money,

unless it receives

additional taxing power

from the state.

If we want a city

of only poor or only rich,

we are going in that direction,

we are driving the

middle class out of the city!

[people chanting]

Save Our Cops!

Save Our Cops! Save Our Cops!

[Wilton] I didn't know

if I would be laid off.

I mean, I didn't think so.

I had seven and a half years

on the job.

How far they gonna go?

Well, guess what?

They went to

seven and a half years!

[man] We are now experiencing

the product of mismanagement

in the city

over many, many years.

What we have had here is

political ineptitude.

[music turns suspenseful]

The union has put up $1,600,000

to meet any shortfall

in the anticipated revenue

that the city may face.

[reporter] Where is the

million-six coming from?

There were--

The union treasury.

It'll go right to the--

the-- Mayor Beame,

I'll put the check in his hand.

[reporter 2] What about

the cops and the firemen?

Will they be reinstated also?

No layoffs there either?

Bob, I don't-- I only speak

to sanitation men.

They go out on strike,

the garbage builds up,

he gets $1.6 million,

he hands at the Beame

and he says, "Here, put all my--

all my men back."

They're gonna get back more

than that million dollars

because every one

of those garbage men

is gonna be cleaning up

the mess that they made

for the last three days.

They're gonna get paid

time and a half

and double time

for Friday, Saturday and Sunday.

Well, I'll tell you

how we feel about it,

we're up to here with Beame.

They're using us.

And I hope to God

that the damn city

blows up.

I'd love to see them cops go.

Because we're tired of the--

[stutters]

of being

on the bottom of the pile.

[commentator speaking

indistinctly]

[soft music]

[music fades]

-[reporter] Everybody ready?

-[man] Yeah, ready.

Governor, Mayor Beame

has just told us

that at this point there is

nothing assured in terms

of any special deal with the

state in terms of helping

the city with its cash crisis.

What is the situation?

-Well, the Mayor is accurate.

-Is the state willing

-to start taking over

some of the city functions?

-Gentlemen, please.

-[man 2] We have a--

-Come on, we have a dinner now.

We-- We have a--

Well, that would require

acts of the legislature,

things of that kind, uh...

The state is ready

and must, to help the city

in any way possible.

Please, gentlemen...

[Donna]

I was teaching political science

at Columbia

when the Governor

called me and said,

"What are you

doing for the summer?"

And I said, "Not much."

And he said, "Great,

I'm going to appoint this board

called the

Municipal Assistance Corporation

to help negotiate

the finances of New York City,

and I need you on this board."

I had written

my doctoral dissertation

on the financial relationship

between states and cities.

So I said, "Okay, Governor,

I'll be happy to do it."

Governor Carey has been taking

a long, hard look at the

borrowing habits

of New York City.

He's been instrumental

in setting up a thing called

the Municipal Assistance

Corporation.

It's a new state agency.

It's already been

nicknamed Big MAC.

[reporter]

Governor, is this board

now running

the City of New York?

The Mayor is beside me

and we wanna strengthen,

strengthen the government

of the City of New York

in this hour of crisis.

So there'll be no

misunderstanding,

the fact that we are here

in a committee to work

with respect to the finances

of the City of New York

in no way is gonna deter

from my managing the City

of New York in the way I think

it ought to be managed.

[Fred] Every bit of

New York City's budget

had to be accounted for

by this group

of financial people

led by Felix Rohatyn.

We have asked

the heads of the banks to

be available to talk to us.

We've asked the heads

of the unions to stand by

and be ready to meet with us

over the weekend.

The Governor is going to ask

the legislative leaders

to come down here

and we will have

all the parties around a table

to see if we can build

some kind of a structure.

[Charles] I had no idea who

in the hell Felix Rohatyn was,

and I figured, here's another

g*dd*mn Wall Street banker

that's gonna tell us,

"Pull in your belt."

In the language of the

early space programs,

we've gotta go

for a couple of orbits

and, uh--

and then we'll see what happens.

We've, uh--

[Charles] I came to know

about the compassion he had

for the people of New York City,

and that just

cutting the City's budget

was not his objective.

We don't have the power

to dictate to the politicians

how they establish the social

priorities of the City,

nor do I think

it would be in any way

appropriate for us to do so.

[Peter] Felix was a dealmaker in

the good sense of the word.

Here we are suddenly

constructing a whole new path

for the largest city

government in the country,

which involved banks,

unions, and politicians.

Felix's role was to bring

those worlds together.

[Alan] My sense was he believed

in progressive politics

and good governance

so he wasn't one

of these individuals

hostile to government,

he was-- he was for it.

And he wanted to help.

[Herb]

There were remarkably few people

working on this,

and there were meetings

that would start

at 8 or 9 o'clock

and last till

12 or 1 in the morning.

[man] Can we have 5 minutes

while you gentlemen and ladies

from British television

do your thing and then

we'll get down

to our own business?

There was a basic understanding

that there was

no choice for anybody

except to come to--

come to terms with this.

Now the idea is that

Big MAC will pick up

the short term debts

that the City has to pay

at the moment

and if all goes well,

it'll pay those debts

by raising more money

through long term bonds.

[Michael] The MAC Bonds were

based on a very simple premise.

You isolated

a stream of revenue,

in this case,

the city sales-tax,

and in effect you issued those

bonds against that stream.

[cashier] $1.30.

[Anthony] The "Big MAC" bond

was going to be triple tax-free.

How they arranged that is way--

way above my pay grade,

and, uh, pay

something like 10%.

So it seemed like

kind of a no-brainer.

-I believe

-I believe!

This will survive

[reporter]

The rally, the first of many

planned in local communities

throughout the City,

is designed to encourage

the purchase of Little MAC bonds

in denominations

of $50 and $100

in order to help save

New York City from default.

I suppose if you believe

in New York City,

put your money

where your faith is.

-Yes, I believe

-I believe!

In New York City

And I'll do my part

To keep this town alive

[Beame] We're fighting back!

We're facing up

to the financial crisis

confronting this city.

We need your help!

I know you're going to give it.

Thank you all,

and God bless you.

[Harrison]

Beame went on television

to say that as

a demonstration of his own

belief in the future

of the city,

he was taking all of his

retirement money

and investing it in city bonds.

I remember looking

at this television set

and saying to myself,

"Oh, my God,

you poor man."

[dramatic music]

[reporter] When Big MAC bonds

went on the open market,

the first billion dollar batch

plunged 10%.

A $100 million

paper loss in a single day.

And Mayor Beame was now forced

to call for more layoffs

and deeper cuts.

You know, I was in communities

talking to people

who were raising this, you know,

"Am I gonna get paid this week?

How am I gonna buy food?

How am I gonna pay my rent?"

So it was a very human problem.

It's a desperate time

for the men and women

who no longer have jobs

because

the city is being denied

the opportunity

to help itself.

I can appreciate the

frustration and despair

of these workers.

The failure in Albany

to give us our taxing rights

has forced us

to balance our budget

with still further layoffs.

We've been

turned upside down,

we have no income,

we don't know

where he's gonna get a job.

I mean, you put

5,000 policemen alone,

not counting all the other

civil employees that are

out of jobs on the streets,

where are you gonna find a job?

$95 a week unemployment

isn't gonna help us.

We have a house, we have bills,

my son

is supposed to get braces.

You put six years in on a job

and then they turn around

and they say, "Well,

we don't have the money

to pay you anymore."

Where can you go?

What can you do?

-[suspenseful music]

-[siren wailing]

[reporter]

You've 10,000 bed patients,

you do 41 emergency runs a day,

you've got about 20,000

clinic patients a day,

now who can handle that kind

of a situation?

It's a tremendous burden

that we face,

tremendous problem that we face,

and we are certainly

in difficulty.

[music continues]

[people chattering]

I heard Mr. Beame promise us

there would be absolutely

no cutbacks

in services or monies

from the Office

for the Handicapped.

Remember, there are

one million disabled people

in New York City.

And that's a lot of voters.

[man] And here to introduce

Mayor Beame is Jim Weihart,

Bureau Chief

of the New York Daily News.

Jim?

[audience applauding]

[Jim] Abraham David Beame,

Mayor of the City of New York,

started at the bottom

as a district captain

in Brooklyn's Crown Heights

section, in 1930.

[Peter] The pressure

of this whole business

took a great toll on him.

I remember one meeting

in the Governor's office

where he was looking

like this out the window...

...for the whole meeting

while the argument

was raging around him,

the Mayor of New York,

the fate of whose city

was at stake.

It's his dignity,

it's his history.

It's the world as he knows it,

being refashioned by these

upstarts in Albany.

[soft, thoughtful music]

[Fred] He was still the Mayor,

but he didn't have

this piece anymore,

and he didn't have

this piece anymore.

Big MAC was running the city.

[woman] The men that sit

on the board of Big MAC,

not one of those bankers

were ever voted in.

And yet they're the ones

that are raising the fare.

Felix Rohatyn!

This is a tax

upon the working people,

upon the-- the riders

of New York City.

[people chanting]

No g*ns, no bridge!

No g*ns, no bridge!

When we get our g*ns back,

the City gets the bridge back.

That's it.

Well, what can I tell ya,

it's a tough route

they gotta take, you know.

Ci-- City's in a hell of a mess.

[chanting]

No wage freezes!

Stop Big MAC!

Workers and unemployed,

time to fight back!

[Donna] There were

protests in the streets

whenever we cut anything.

Including when we

imposed tuition

on the City University,

destroying one of the

clear identities

of the City, free tuition

for any New York City resident.

[picket line chanting]

It was just devastating.

[music fades]

What does our society

owe to its citizens?

Walter Heller?

Well it's really

a question of what,

in a sense, do we owe to

each other in a democracy?

And I think, first of all,

we owe each other,

uh, equality of opportunity.

And that's something

we have to do collectively

rather than individually.

That means secondly,

that those who are denied

by the conditions of the economy

and the conditions of society,

who are denied

equal opportunity,

have to have a certain amount of

collective support

from government.

Milton Friedman, how do you

approach that question?

I think putting the question

in those terms,

"What does society

owe citizens?",

grossly misstates the issue

and is responsible

for a lot of our difficulties.

And I think what we need

is to have a system

in which we as individuals

can have a greater

degree of freedom

to pursue our own interests,

in which we are controlled less

by Big Brother in Washington,

in which less of our money

is taken off there,

and in which taxes

are not imposed on us

without our having voted

explicitly for them.

I once held her

In my arms

She said would always stay

Well, I must've been mad

Never knew what I had

I threw it all away

I threw it all away

[music fades]

[lively, upbeat music]

-[reporter] How you stay cool?

-Positive thinking. That's all.

You just think positive,

think cool and you'll be cool.

Ooh ooh ooh ooh

Ooh ooh ooh ooh

Ooh ooh ooh ooh

Ooh ooh ooh ooh

[Alan] The Americana was the

wage deferral negotiations.

We were trying

to avoid more layoffs

in return for deferring

wage increases.

Why can't we be friends

Why can't we be friends

Why can't we be friends

Why can't we be friends

We have thought that one way

to bring fiscal stability

to this city

is to have all members of it,

of the community,

move forward together.

And a voluntary agreement,

as we've always said,

would be

a highly significant step

in that direction.

-I think the agreement...

-[Herb] You gotta remember

all of these unions represented

very different kinds of people,

they had different

interests in their contract.

It's really what

made it complicated.

We're going to have

a series of meetings.

We started this morning with

the Governor and his staff.

The legislative leaders

are coming in.

We're going to meet with

the labor leadership

this afternoon, we're going to

meet with the banks

this afternoon and we

will be continuing

into the night and tomorrow.

[Herb] I spent

a lot of time with Felix,

who was extraordinary.

He was the most tenacious

person I've ever met.

What do you think

the chances are,

putting something together

by the end of the weekend?

You're asking me,

is there a chance to put

something together

from the point of view

of both City and State

that is self-contained without

some form

of Federal involvement?

I don't think there's

any chance of doing that.

[reporter] What form

of federal involvement?

I don't know yet and we won't

know until we see

how the other pieces of the

package develop.

[Donna]

At that meeting, Felix Rohatyn

brought uncommon

partners together,

and asked everybody

to give something up.

[man] An empty pitcher, right?

And it wasn't just symbolism.

He didn't believe

that you couldn't put

everybody at the table

and get this done.

[lively, upbeat music]

But it was not that easy.

[Betsy] The head

of the Sergeants union

came to a meeting where

he walks in and he

opens his jacket and takes

his g*n out of his holster,

puts it on the table.

And you know,

that kind of set the tone

for the negotiation.

[Stephen] Labor leaders had

different ways of negotiating.

For example,

the bridge operator guys.

I mean, they could close

the city down, you know.

Open the bridges

and nothing gets in.

There were drawbridges

all over the city.

[Eugene] The workers

turned off the controls

and walked away, leaving the

bridges in the up position.

In a city where

traffic is impossible

on the very best day,

that had an immediate

and profound effect.

So, the unions

had enormous power.

[music ends]

[Herb] These negotiations

were going generally

pretty smoothly.

There was a feeling

of mutual trust.

But when we

got down to the issues of

reductions in--

in employment,

it got to be

really difficult.

What are some of the demands?

Uh, I'll talk about those later

but I think it's enough

to say at this point that--

that they've at least doubled

what they're asking today,

from what they did yesterday.

[Manfred]

I liked the union people

but Shanker

was a different problem.

The teachers union

was always

a very difficult union

to deal with.

[man in speakerphone]

People, victory to the teachers.

Build a labor party.

[man]

Read the socialists' viewpoint,

get the viewpoint of what the

socialists have to say.

[Manfred]

Teachers think they know a lot,

and they do know a lot,

and I respect them,

but they don't know

anything about politics.

[reporter] As New York's

money crisis deepened,

the Board of Education

told teachers they might

have to accept more layoffs.

The union

pretty much said, "No."

And so, the teachers held what

their president called

"The greatest gathering of

teachers in the history

of the world" at

Madison Square Garden.

[people cheering, clapping]

Al Shanker was...

Not like a God. He was a God.

Politicians feared him

because the pen is mightier

than the sword and this man,

you know,

wasn't afraid to speak.

We are about

to take an action...

...because we have been given...

...no other choice.

We had always felt...

...that you may

not get rich...

...being a civil servant,

but you always had job security.

Now we weren't getting rich and

we weren't getting job security.

[indistinct chattering]

[woman] Put your ballot

in the box right here.

[John] Between 14,000 and 15,000

teachers were laid off.

Everybody felt that

this was a slap at education.

I voted to strike. I did.

[suspenseful music]

[chanting] Strike! Strike!

We didn't want to strike,

we really didn't want to strike.

-We are forced into the strike.

-[male reporter] Why?

[teacher] Because the things

for which the union fought

are being asked

to be given back.

Our shop classes were cut out

because the judge ruled

that 90 minutes had to be

cut out each week.

-[female reporter] That's what

he cut?

-Yup. The shop.

[female reporter]

How do you feel about it?

I don't like it, 'cause

I have photography

and so it's great.

[female reporter]

What about your classes?

Our class is like 53 kids

in a 35-- 35-room class,

and they stand on the sides,

they don't pay attention.

Teachers, it's bad because

they are the foundation

of your society, they are

teaching your children.

Now, if you cut down teachers

and you increase the class,

they cannot function.

We understand that

the city has problems.

We're willing to compromise

and we're willing to bend,

but we're not willing to see

the school system destroyed

and when that's the choice,

we have to fight back.

Mr. Shanker,

if the cupboard is bare,

where are they

gonna get the money

to meet teachers' demands?

I have no idea, but I--

I know that there

are certain priorities here.

And the priority is to take care

of the bankers

and not the children,

and I say that the priorities

ought to be reversed.

[music fades]

Incidentally,

a small bubble of hope

burst for New York City today.

You remember an archivist

discovered last week

that the city had loaned

the Federal Government

a million dollars

during the w*r of 1812.

He couldn't find

a record of repayment.

And with interest, that would

mean the government owed

the city about

$11 billion today.

Well, the records

have been found.

The loan was repaid

a year or so later.

[intriguing, lively music]

[reporter]

All of it makes the city's

financial situation sound rather

doubtful, is it?

No, it's not.

[Fred]

The City probably could've

shifted money back and forth

in an endless way

to keep it going.

And then New York City

came up with another piece

of financial sleight of hand,

for which it has become famous.

It authorized the payment in

advance of real estate taxes.

We hope it'll spread

throughout the city,

other business groups

and citizens

and associations will do

the same thing.

[Linda] Things were

deteriorating rapidly

so everybody was scrambling

to get whatever

they could from wherever.

New York's Mayor

Abraham Beame said today

he's getting letters from

all over the country

with money in them

for New York City.

25 to 75 letters a day, he said,

with contributions

from 3 cents to $2,000.

[Jim] How do you prevent

a municipal bankruptcy

of this magnitude,

[chuckling] bigger than half

the countries in the world?

-[music ends]

-[indistinct chattering]

[gavel bangs]

[man] Good morning, we're, uh,

honored by the, uh...

...presence of a number

of distinguished witnesses,

and particularly by our...

...first panel, and especially

by the Governor of New York.

[Jim] If you try to accomplish

something in Washington,

you don't have to deal with, uh,

535 people right away.

You have to deal with seven

people in the subcommittee.

[senator] Now, what we all

have to consider

is how the people back

in our respective states

respond to this.

If we're going to help you out,

we've got to

justify it to them, and--

and right now we're having

great difficulty doing it.

Now, you noted yourself

that New York

has the strongest

municipal unions in the nation.

I suggest

that they're too strong,

and the salaries are

inordinately high in New York.

[Charles] It almost became

a position that some people

were glad

to put us in our place.

There was an animosity

toward New York...

...that I couldn't believe.

It must be embarrassing to the

city slickers of New York

to have to call on

their country cousins, uh,

to, uh, lend them

a helping hand.

I was gonna do

all I could to, uh,

save them from

this embarrassment.

You know,

if New York went bankrupt

who gave a flying f*ck?

In fact it's probably

good for them,

because they're,

you know, they're arrogant,

self-centered, uh,

you know, sinful,

no good, whatever.

The Mayor

of the City of New York,

the honorable Abe Beame.

[audience applauding]

Thank you very much. Thank you.

I don't need that, thanks.

Now, there's a strong parallel

between the great Italian

explorer we honor tonight

and the city

which pays homage to him.

Like New York,

Christopher Columbus

couldn't get financing

in his own country.

[audience laughing

and applauding]

[reporter] For all the talk

of probable default,

no one was yet saying that

default was absolutely certain.

That's because the city unions

may yet come to the rescue.

A new effort is being made

to borrow the money

the city needs from the city

employee pension fund.

[Richard] The plan was

all the unions

would buy MAC bonds

on the grounds that the

public employees

of the City of New York

were in real jeopardy,

and that they oughta

participate in the solution.

Al Shanker said that he was not

going to buy the MAC bonds.

But an agreement will never be

worked out if each time

we sit down

at the bargaining table

they add more items

that have to be negotiated,

items which were never

on the table before.

[music fading]

I'm sorry to have to tell you

that the, um,

teachers' pension

system has voted

against, uh, making

the commitment to us.

Does this mean New York

will default tomorrow?

I would think if this stands,

the, uh, likelihood

is very great

that we will default tomorrow.

[soft, jazz music]

[music continues]

[Richard] I was at home

and about 10 o'clock

the phone rang,

it was Governor Carey.

He asked me to find Al Shanker

and get him to change his mind.

So I talk with Shanker.

We have

an interesting talk and--

for-- until 5 o'clock

in the morning

and Shanker says,

"I've got to talk to

a few people, I'll call you."

So I went home

and, um,

Shanker never called.

[Howard]

I helped draft a press release

in great secrecy

announcing that we were filing

for bankruptcy

for the City of New York.

After it was written we said,

"What do we do with this?"

And we say, "We hide it."

[chuckles]

"We don't do anything with it.

But we're ready."

We look forward

to possibility of default

in the morning unless

something else--

unless a miracle happens

between now and 9 o'clock.

[reporter]

You don't expect that miracle?

No, I don't.

The picture in my mind is vivid

when the Mayor sat down

and had a shaking hand,

as you can see from his

autograph on my wall,

and signed the

bankruptcy petition.

At that point, the Mayor

called the President.

He was asleep, but we left

a message with the duty on--

The officer on duty.

A new day

has dawned in New York.

We're going bankrupt. [chuckles]

[music fades]

[soft, tense music]

[news host] Our top story

this morning is New York City,

which has $450 million

in short term notes

falling due today

and not enough money

to pay them off.

The city has been on the brink

of default before

but this time it's looking

more and more like

the real thing.

Are you an individual bond

owner?

Yeah.

Do you think

you'll be paid today?

I hope so. I'm not sure.

Eleanor Bissinger

is a vice president

of Leventhal, Incorporated.

She's done a lot of research on

who might get hurt

if New York City defaults.

And from the sound of things,

a lot of little people

are in fact going to be hurt.

Is the small investor

going to lose his money?

He is still holding...

...a-- a debt of

the City of New York

that will be honored in-- in

-some way or fashion

-[reporter] So, they're not

gonna

-that nobody knows.

-tear up the bond, then.

Please don't-- Exactly.

Please don't tear up the bonds.

-I know.

-[reporter] Mr. Mayor,

Mr. Mayor, has a private

-understanding been reached

-I beg your pardon?

with the teachers' union

in return for cooperating today?

I have made no arrangements

with Mr. Shanker at all.

[suspenseful music]

[reporter] Are you here to get

the word on the default

or are you here because

you think Shanker

is gonna come around

and release that money?

Well, I'm here to put a little

pressure on him.

[reporter 2] Well Matt,

when you say pressure,

exactly what do you mean?

Punch him. [chuckles]

No, no, we're gonna try and

twist his arm and, uh,

explain to him the way he's

never been explained before,

exactly what the situation is

and that he better do it

if he really wants

to get out of here alive.

-[reporter 3] You are

referring to?

-[Matt] Al Shanker.

[reporter 4]

Are you more optimistic now

than you were last night?

Uh, no, I am not.

[reporter 5] At this point the

ball is in Al Shanker's court?

Yes, I would say so.

It's been there all night.

[Ira] I think Shanker knew,

as did the other unions,

that if this

all came to a collapse,

they were--

they were the villains.

It was known.

Now were they the villains?

No, the city was the villains,

everything that led

up to it was the villains,

but if the city

went over a cliff,

welcome Mr. Shanker

to page one of the Daily News.

-[reporter] What-- What--

-[reporter 2] What happened

inside?

Was the Mayor doing some arm

twisting? Trying to get you

-to change your mind?

-[Shanker] No, you'll have to

-ask the Mayor about that.

-[reporter 2] If the city

declares default today

they'll blame it

on the teachers.

Well, I think that's their game

but there's no reason

why all the attention has to be

on one fund.

[female reporter] But they're

saying that teachers

hold the future

of the city right now.

Well, anybody who puts

up the money holds

the future of the city.

What would it take to make you

change your mind, Al?

-Excuse me.

-[female reporter 2]

Mr. Shanker, what will it take

to make you change your mind?

[Betsy] I remember Victor

coming back

to our house in Brooklyn

and him saying to me,

"That f*cking Shanker, you know,

I almost threw him

out the window."

And I-- He said, "I-- I really

came close to doing it."

Because he was so obstinate.

And let's go back to

Robert Shackney, again,

for an up-to-the-minute report

on what's happening

at that meeting

about New York City's

busted bank account. Bob?

We've got two hours

before the banks open,

two hours before

the start of business, so

it is possible still that

the default that we're talking

about could be avoided.

[news host]

Well, suppose they don't?

What does this

really mean in human terms,

does anybody know yet how many

people lose their jobs, or...?

Well, no one knows just how

badly people will be hurt.

The end result,

said one banker, is that, uh,

New York

could turn into a Calcutta.

The fear that

you are hearing is inchoate.

The fear is that the system

is going to fall apart

and that the consequences

would be unknown.

[suspenseful music]

[Richard] About 10 o'clock,

I went down to Carey's office

and the phone rings,

it's Shanker,

says, "I wanna meet

with you and the Governor,

but I don't

want any press around."

So I said, "All right, Al,

we'll meet you at my apartment."

Governor Carey has left the

office, uh, some while ago

to meet with teachers union

president Albert Shanker

at an undisclosed location

to discuss the current

teachers'

pension fund as it relates

to the New York City crisis.

[reporter] Has the governor

made a deal with, uh--

with the president of the

teachers' union?

I know of none-- there--

That is, he, uh-- he hadn't

indicated any deal to me.

For all the mayors

in all the cities out there,

it seems the real lesson

of this story

after all the hard talk

about money

is that it really gets down

to something

as ephemeral as faith.

Faith of the investors,

who have the right

to ask right now

if New York has the strength

to put its house in order,

or if the recent past

is any guide,

it does not have the gumption,

but if the future

holds in it h*--

[inaudible]

For all the mayors

in all the cities...

[Richard] As everyone knew,

the city was ready to file

the bankruptcy petition.

[music fades]

But finally,

at about 2 or 3 o'clock,

Shanker agreed

to buy the MAC Bonds.

Now, this afternoon...

...I recommended to the trustees

of the Teacher Retirement System

that they make

the investment of $150 million.

Can you go through the mechanics

of just what it was

that led you

to change your mind?

Who did you talk to?

It wasn't talking to anybody

that changed my mind.

It's the fact that nobody else

came forward.

And, uh, we didn't want to

share the responsibility

of having the city go down.

-[indistinct]

-[man] You're--

You're blocking mics.

-I'm sorry.

-[reporter] Mr. Rohatyn,

have we avoided default?

Today? Yes.

We're ready to hand out

the checks right now

and we're asking each of you,

those who are here

to redeem their bond,

please line up in front

of three windows

and the checks

will be delivered to you.

Let's keep it orderly,

it's been a wonderful day.

We thank you for your patience.

Okay.

-[chuckles]

-[reporter] How do you feel?

I feel rather happy

but I never had any doubts.

[news host]

New York City escaped default

on a half billion dollars

of debt

by less than an hour on Friday

to face the same problem again

in just five weeks.

So Mayor Abraham Beame

was in Washington today,

seeking federal aid to ward off

the new crisis.

[man] Isn't it a fact that

what's happened to New York

is not the fault of Simon,

or of the President,

but it's simply because

you have been buying election

for years and years

at the taxpayer's expense,

-that you've had the dance--

-[Beame] The answer

of course is, no.

And you had the dance and now

it's time to pay the fiddle?

We never asked anybody to

give us one red cent.

-[Kelly] Mr. Mayor--

-All we're asking

is that the-- the President

and the national administration

and the Congress give us

give us the same treatment

for people that

they give to corporations.

It was an especially hectic day

for Mayor Beame.

Ironically, he was scheduled

to receive an award today

from the Optimists Club, but he

canceled his appearance.

[indistinct chattering]

[female reporter] You went to

have a New York City, uh...

[man] Yes, we had

a meeting on New York.

[male reporter] Does it look

like things are

-beginning to move here?

-No, well, we're

just having further discussions

and I'll be back over

in an hour and a half

to, uh-- to meet

with the President.

[male reporter 2]

Do you expect a statement?

Do you expect a statement from--

I have no idea, the White House

will, uh, make that announcement

if there's going to be one,

there's-- that's, uh--

there's no

discussion of that

right at this point.

Well, I'll see you again

in two hours.

[reporter] The big three

of Big MAC arrived

at the

Treasury Department at 9:30

after catching the first

shuttle out of New York.

At 10:10, they filed into

Secretary Simon's office.

The meeting lasted

one hour and 45 minutes

and produced virtually nothing.

[male reporter] Mr. Rohatyn, did

you discuss the human aspects

of the possible default?

We did indeed.

The social dislocation

caused by a default, the--

The, uh-- The hardships

to the people of the city,

the possible cut in services.

It certainly seems to be a risk

that is so large

that every effort should

be made to avoid it.

[reporter 2] Do you have

anything encouraging

to take home to the Mayor?

-Uh...

-Anything at all?

No.

[soft music]

[Howard] People were

pushing him to step down.

I said, "Abe,

you can't step down,

it's not your fault,

don't even give it

a second thought

of resigning as Mayor.

[lively music]

[audience applauding]

[woman] And now folks,

Mayor Beame will dedicate

and cut the ribbon of the

Flatbush Senior Citizens League.

-Here we go.

-[audience applauding]

[soft music continues]

[Fred] It got to the point

where he was

the Mayor in name only.

He was absolutely

devoid of power and he knew it.

[audience applauding]

I can't think of a more

flattering gift.

An appreciation

of various art forms

brings people together.

[man] Beame was smarter than

many people gave him credit for,

and he was an honest man,

but he was the fall guy.

Everything had crumbled

and he was the Mayor.

[female reporter] In your

meeting with Mrs. Ford today,

did you discuss any of the

city's problems with her?

Perhaps do a little lobbying?

No, no, she's here

for a good time

and I wanted her

to enjoy herself.

[female reporter]

So you did not discuss

the city's problems at all?

No, but I think she, uh--

She saw a lot of signs around

which maybe

would give her something

to, uh, remember us by.

[female reporter]

Signs of the city's problems.

Yeah. That's right.

[Eugene]

One day, I remember vividly,

was on the top floor

of Rockefeller Center

in the Rainbow Room.

He and I were standing

looking out over the city,

the kind of view

that you see in movies,

the city seeming to go forever.

And the Mayor looked out

at it and said,

"This city is too big to fail.

They're not going to

let it go down.

It's not going to happen."

[music fades]

[man] Members

of the National Press Club,

the President

of the United States.

[David]

I had the impression that Ford

wanted a hard line speech.

I had gotten a call from Cheney

asking me to do

an independent draft

so I wrote

a very hard-headed speech

and sent it over,

with the understanding

it was gonna be staffed out.

And what happens

in the staffing out

is it gets watered down.

I was shocked

when he gave the speech.

The time has come for all

Americans to consider

how the problems of New York,

and the hard decisions

they demand

foreshadow and focus upon

potential problems

for all governments.

Responsibility for New York

City's financial problems

is being left

on the front doorstep

of the federal government,

unwanted

and abandoned

by its real parents.

I can tell you,

and tell you now,

that I am prepared

to veto any bill

that has as its purpose

a federal bailout

of New York City

to prevent a default.

I am fundamentally opposed

to this so-called solution.

[intriguing music]

[Michael] You get on the subway,

you get onto the bus,

and 90% of the people would be

reading The Daily News.

The Post was kind of a joke,

my father-in-law always

referred to The Times

as the uptown Daily Worker,

but The News was the paper

that the average New Yorker,

when there was

such a thing, read.

[reporter] How about you, sir?

What do you think about the

President's speech on New York?

What I think

couldn't be put on the air.

He's got his point of view, uh,

we New Yorkers have ours.

Personally, I think it stinks.

And he's gonna lose

an awful lot of votes.

[David] Ford was very deeply

offended because he said,

"I never said that!

I didn't say, 'drop dead,'

I never used those words,

this is unfair, I--

I was being much

more reasonable than that."

[Michael] I think Ford

probably had a little

of that Midwestern

suspicion of city slickers

and are they taking the American

taxpayer, blah, blah, blah.

But I think, essentially,

he just got

very, very bad advice.

[music fades]

Mr. Ford proposes, indeed,

to put a noose around our necks.

We will not accept that fate

without a fight.

[upbeat, funk music]

[crowd applauding]

The President of the

United States, Gerry Ford!

[crowd booing]

Those of you who are here today

are here to say

loudly and clearly

to Mr. Ford,

we are determined

that this city will survive.

We can't punish New York City

because it has been

a city with a heart.

[Carl] In that speech,

I talked about the impact

that this was gonna have

on everybody.

But Gerald Ford and the

Republican leadership

in Washington

simply felt that

this was not an obligation

the federal government had.

Municipalities and states had to

take care of themselves.

[music fades]

Some figures

from the Federal Reserve

underscore the fact that

this is more than just

a New York City problem.

Banks in 26 states

have 20% or 1/5 of their capital

in New York securities.

Now, suppose

a couple of hundred banks

in this country

became insolvent.

What happens

internationally, now?

Who's gonna trade

with those banks?

[suspenseful music]

[Kevin]

At the summit, Helmut Schmidt,

the Chancellor of Germany,

supposedly tells Ford,

"If New York goes down,

the dollar is scheisse ."

[chuckling]

You know, the dollar is sh*t.

He had to be told this.

You know, it's--

it's-- it's ridiculous.

[music fades]

Ford's calculation

was mostly political.

He was a moderate Republican and

his wing of the party

was in a panic

over the conservative challenge

led by Ronald Reagan.

[man] How would you feel if you

got back from Europe and saw

on the covers of the leading

news magazines the picture of

this fellow Ronald...

...Reagan, is it?

Who the President, for some

reason, thinks represents

a terrible right wing threat,

so he's got to

out-Reagan Reagan.

This is simply bad--

bad advice for

the President. He--

He doesn't do very well

as a right wing extremist,

thank God.

-[man] Governor,

for just a second...

-[woman] A message for New York?

What's my message for New York?

Well it's the same message

any place else,

and for New Hampshire.

We've got too much government

and we should reduce

the size of the government

and we should turn

authority

back to the states

and the local communities,

and particularly to the

individuals.

-[woman] Do you--

-[man] The White House

said today...

[Alan] The fiscal crisis

played into the hands

of the Ronald Reagans

of the world

who thought that government

was the problem

and not the solution.

We were trying

to say that government

is an essential part

of everybody's life

and certainly it was

in New York City.

[soft, gentle music]

[Anthony] Everything that my

family and I accomplished here,

I owe to the City of New York.

I'm gonna be emotional

about this. [chuckles]

I mean, it gave a bum like me

an opportunity

when there were

no opportunities for people

without education, without

training, not even good looks.

So...

...I'm from an immigrant family,

as millions of us in the country

and-- and certainly

in New York City are.

And if you look at the people

that ran the city

in the 1950s and '60s,

almost every one of them

were maybe first or second

generation Americans.

Almost everyone.

And that was extraordinary. I--

I don't know if any

other place can say that.

[music fading]

Public sentiment on federal aid

to New York City

apparently

shifting in favor of aid.

A Gallup poll conducted before

President Ford's speech

opposing aid showed the public

49% to 42% against it.

But after

the President's speech,

the public favors federal aid

to New York, by 55% to 33%.

All the serious people agreed,

we do not want

New York City to default.

President Ford began hearing

from advisors

that this is really

gonna hurt the country,

and you need to step up.

[Steve]

But the political reality was,

Ford and

Congressional leadership

had to extract a pound of flesh,

you know, from New York, for any

conceivably successful

federal bailout.

President Ford continued

to apply pressure

to the New York Legislature

to pass its own rescue package,

which includes higher taxes.

As one White House official

put it today,

"When we see that,

we'll believe it."

[reporter]

The New York Legislature met

in emergency session

to begin putting together

the $6 billion financial plan

to save New York City

from default.

[Carl] I am also a minister,

and so I was asked to provide

the opening prayer.

And I remember, you know,

Matthew 5:14,

about...

...The City on the Hill.

The City of Hope.

The City of Opportunity.

The City that was a model.

The... [stuttering]

...text says,

"A light to the Nation."

So I put that in my prayer.

It was quite

a momentous occasion.

-[gavel banging]

-[man] Will you address

the chair please?

[Manfred] Everybody understood

how important

the city was to the state.

If the city goes bankrupt,

the State of New York

couldn't be far behind.

Number Seven, Increase

in the Automobile Use Tax,

from $15 to $25 and this raises

15, uh, million dollars.

We knew we had to do it

on a bipartisan basis.

Herbst...

No. Hevesi...

Yes.

Pesci, no.

Mr. Speaker, yes.

Ayes 84, noes 53.

[upbeat, soft rock music]

[man] In the eyes

and under the spotlight

of this nation,

we have risen

to the responsibilities...

...that was expected

of all of us.

-[gavel strikes]

-House stands adjourned

until December 3rd at 12 p.m.

I know that the people are not

gonna welcome the news

of taxes, uh,

for the holidays, uh,

taxes that impact them,

But we've tried to do our best

to make it the kind

of package where everyone

has to sacrifice something

and, uh, not aim it

at the low income

or lower middle income people.

[indistinct chatter]

[Peter] Hugh Carey

gambled his political future

on getting the City

out of a mess

that he didn't create.

It's one thing

to go out on a limb

and try to help

the City and fight for it,

it's another thing to lash

the government for which

you're responsible

the mast of a ship

that looks like it's sinking.

Once the legislation is

completed upstairs,

which I expect, uh,

in due course,

then we must, uh,

tie down the, uh,

pension fund contributions

and the banks.

And I'm going down to City now

to do what I can

to aid Mr. Rohatyn in sealing

that agreement.

[Kevin] November 26, 1975.

Finally, all the pieces

come together.

Albany came through

with some 200 million

in additional taxes.

You had the municipal unions,

which put up

one and a half billion

to back the city's bonds and

make concessions as well.

And you had the Feds,

who put up a lot of money

for the short term,

2.5 billion,

to make this work.

I have decided to ask the

Congress for authority

to provide

a temporary line of credit

to the State of New York

to enable it

to supply seasonal financing

of essential services for the

people of New York City.

[music fading]

-Hi.

-[man] Hello, Mr. Mayor.

-How ya doing?

-[man] Are you happy today?

Mm-hmm.

[people chattering]

Yes, I think that'd

be better, huh?

-[man 2] You have

to smile, first.

-Okay.

[chuckling]

-[man 3] Okay... [indistinct]

-All right.

President Ford's decision

to support aid for New York

marks a crucial

turning point

in our continuing

struggle to resolve

[fading]

the city's fiscal crisis...

[soft music]

[Felix] Even at best,

if we succeed

in getting

this plan off the ground,

this city will

be a much lesser place.

You say this will be a

lesser city. What do you mean?

The City will just have to do

with less money.

And that will mean that

libraries may be open less,

that garbage pickups may suffer,

that you may have less

protection than you have today.

That children

who are already, uh,

probably not getting

enough education will get less.

That, uh,

poor people will suffer,

since they are always

the first to suffer.

[Judah] To have a society

that is beneficial to all,

you have to figure out

how to pay for it

in an equitable way.

Everybody has to

pay their share,

to create it and to help

government fulfill it.

[Charles] The services that

you provide for a city,

you provide for the wealthy

as well as the poor.

And if rich people had to pay

for private police services,

fire services and whatnot,

they wouldn't

wanna be in a great city.

[Fred] I was born and raised

in New York

and I've wanted

to live nowhere else.

It has everything

that's wrong with society,

but it has everything

that's right with society.

New York was

known best...

...as a city that--

that listened to needs and

took care of people's needs.

Which after all, isn't that what

our government's all about,

supposedly,

to take care of people?

[interviewer] Is there really

any chance New York can recover?

-Sure. I--

-[interviewer] Why?

Because New York

is still an enormous part

of this country

and I think ultimately

the country,

the Federal government,

has to realize that

you cannot have a--

an industrially

advanced culture

without having

thriving urban centers.

[music fades]

[interviewer]

Do you think three years

from now it will have worked?

Uh, if you had

to give odds on it?

Oh, you know, I... [chuckles]

I don't give odds anymore,

I think it has to work.

[upbeat, rock music]

In the years

Since I was here

On the street, I'm just

Passing my time away

To the left

And to the right

A town of stone

Grows to the sky

And it's out of sight

In a fading light

Here I am again in the city

With a fistful of dollars

Oh, baby

-You better believe

-I'm back!

Back in the New York groove

I'm back

Back in the New York groove

I'm back

Back in the New York groove

I'm back

In the New York groove

In the New York groove

In the back of a Cadillac

With a lady by my side

Tell you where I'll be

Stop at 3rd and 43

Dance into the night

It's gonna be ecstasy

This day was made for me

I feel so good tonight

Who cares about tomorrow

I'm back

Back in the New York groove

I'm back

Back in the New York groove

I'm back

Back in the New York groove

-I'm back

-New York groove

New York groove

New York groove

I'm back

Back in the New York groove

I'm back

Back in the New York groove

I'm back

Back in the New York groove

-I'm back

-New York groove

-New York groove

-In the New York groove

-I'm back

-New York groove

New York groove

-I'm back

-New York groove

New York groove

-I'm back

-New York groove

New York groove

-I'm back

-New York groove

[fading]

New York groove

I'm back