ABSTRACT
In February 1971, then New York City Comptroller Abraham Beame issued a public statement reprimanding the major credit-rating agencies Dun and Bradstreet, Moody’s, and Standard & Poor’s for not lifting the city’s bond rating for five years, after their first downgrade to “high risk” in 1966.3
Beame was especially upset because New York City’s rate was significantly lower than that of New York State and its essentially bankrupt Urban Development Corporation, despite the fact that the city was not in such dire straights-yet.4 This was indeed a serious matter for Beame and his employer, Mayor John V. Lindsay. With a lowered rating, New York City had to pay higher interest rates for borrowing money through municipal bond sales-huge sums that cities require to maintain vital public infrastructure.5
