Jefferson County, Alabama, declared the largest municipalbankruptcy in U.S. history, capping a more than three-year sagathat turned it into one of the biggest casualties of Wall Street'scredit crisis.

The move yesterday by Alabama's most-populous county came afterstate lawmakers failed to back a September agreement with creditorsled by JPMorgan Chase & Co. that would have reduced itssewer-system debt of more than $3 billion. Governor Robert Bentleyand local leaders worked unsuccessfully for two months to rallysupport for the deal, which fell apart anyway.

“We've reached that last resort,” Commissioner Joe Knight saidyesterday at the meeting before the 4-1 bankruptcy vote. “We couldcontinue and keep kicking this can down the road, but I think thepeople of Jefferson County have had enough.”