In 1956 the New York City Opera suffered a financially disastrous season that led to the resignation of the distinguished Erich Leinsdorf as director and chief conductor. That was perhaps the lowest point in the company's history. The board of directors pored over dozens of nominations for Leinsdorf's replacement before they decided on the one person who had the confidence of everybody -- Julius Rudel. Twenty-two seasons later, he is still firmly in command, and the once struggling City Opera has risen to world prominence. Although its $8 million annual budget is much smaller than that of the Metropolitan Opera and the major houses of Europe, Rudel has been able to get many singers who are unequaled anywhere, and has staged far more new works by living composers than has Lincoln Center's "other" opera house. Apart from its musical significance, the City Opera has become a sort of living symbol for the arts in America, flourishing in the face of financial hardships, and somehow emerging more creative, more artistically exciting because of those hardships. Why else would people like Beverly Sills and Sherrill Milnes perform at City for a top fee of $1,000, or even for free, when they can get $10,000 for a night's work elsewhere? "We build loyalties," explains Rudel in his delicate Germanic-British accent, the morning after conducting a benefit performance of _The Merry Widow_. "A lot of our singers go on to other companies, but they come back. They don't forget us. The New York City Opera has produced more great singers than probably any other company in the world." It is early, even for this man who begins his work as soon as he get up and keeps going till late at night with his multiple roles as music director, chief conductor, administrator, impresario and goodwill ambassador. Clad in his colorful dressing gown, his thick silver hair shining, he seems an entirely different person from the magnetic orchestral leader whose presence on the podium generally guarantees a full house. At his expansive Central Park West apartment, he is low-key and to the point, and fiercely proud of the City Opera's achievements. "We try to look at every opera we do with fresh eyes, as if it had never been done before. We try to reexamine everything about the opera. Sometimes the tradition attached to a work differs from what the composer and librettist intended. ... Tradition was defined by a famous conductor long ago as 'the last bad performance.' For example, in _Turandot_ there's a character who had been traditionally [portrayed] as blind. But it makes no sense in the story for him to be blind, so we don't play him that way. We're restoring the classics, not changing them."