It’s a Wonderful Life (1947)

DIRECTIONS: Read the following article and answer the corresponding questions
before watching the film. THIS SHOULD TAKE NO LONGER THAN TWENTY TO THIRTY
MINUTES.

'Great Depression' Lessons from 'It's a Wonderful Life'

by Len Hart, The Existentialist Cowboy

Watching CNN leaves one the impression that the U.S. is poised, like George Baily on a bridge,
about to jump off into another Great Depression. George Baily owned the local 'Building and
Loan' from which he received deposits which he loaned to build homes in Bedford Falls, a
symbolic American 'every town'.

The film --'It's a Wonderful LIfe' --is set in a time shortly after World War II. James Stewart is
George Bailey, a man whose imminent suicide on Christmas Eve required the intervention --not
of Congress --but a 'guardian angel'. In the real world, when big banks required a 'guardian
angel', they got a bailout! They were not George Baily nor are big banks an integral part of real
communities like Baily's 'Buildling and Loan' had been in Bedford Falls.

On Christmas Eve, while on his way to deposit $8,000.00 for the Building & Loan, Uncle Billy
(Thomas Mitchell) encounters Mr. Potter and, bursting with pride, shows him the newspaper
article about his nephew, about to be honored by the President. Absentmindedly, he leaves the
deposit envelope with the $8000 in the folds of the newspaper; Potter discovers it later in his
office, but since Billy left the bank without officially depositing it into the B&L account, Potter
keeps the money without crediting the account. This is also the day the bank examiner is to
inspect the Building & Loan's records; he arrives to find the money missing and George and Billy
frantically ransacking the place looking for it. Returning home, George sees his whole life as a
massive failure. In desperation, George appeals to Mr. Potter for a loan to rescue the company;
Potter turns him down when all the collateral George can offer is $500 equity in a $15,000 life
insurance policy. Potter cruelly remarks George is "worth more dead than alive." Later, George
crashes his car into a tree during a snowstorm and runs to a nearby bridge, intending to commit
suicide.
--It's a Wonderful Life

In the 1930s, disillusioned Americans might have embraced full blown socialism. The 'right wing'
was spooked. The FBI considered 'It's a Wonderful Life' to be a subversive film, because it
"deliberately maligned the upper class" and attempted to show that "people who had money were
mean and despicable characters". They might do so again if it might avoid another Great
Depression --still misunderstood by most writers, historians and economists. Right winger
cheerleaders for 'laissez-faire' economics must be chagrined by a recent 'Marxist' bailout of so-
called 'free enterprise'. Just as economists are conducting post-mortems on our ongoing crash,
economists were reading the 'bones' left behind by the stock market crash of 1929.
However, in 1963, Milton Friedman and Anna J. Schwartz transformed the debate about the
Great Depression. That year saw the publication of their now-classic book, A Monetary History of
the United States, 1867-1960. The Monetary History, the name by which the book is instantly
recognized by any macro economist, examined in great detail the relationship between changes
in the national money stock--whether determined by conscious policy or by more impersonal
forces such as changes in the banking system--and changes in national income and prices.
--Ben S. Bernanke, The Federal Reserve Board, Money, Gold, and the Great Depression
What Bernanke fails to mention is that Friedman --despite his great reputation and adulation as a
'conservative' economist --leaned heavily upon the work of John Maynard Keynes in his analysis
of the Great Depression.

[John Maynard] Keynes seemed to be the right man for the time as he was reflecting the
increasingly common view that blamed the capitalists themselves for the situation. In the
General Theory Keynes rejected the view that the boom-bust cycle was due to over-expansive
government monetary policy and that the stubbornness of the Depression was due to government
interference with market mechanisms. He labeled all economists who believed such views as
“classical”—in other words, hopelessly out of touch with reality. Instead, Keynes proposed
a “general theory” that he thought capable of explaining not only the good times but also the bad.
According to Keynes, what drives the economy is aggregate demand or aggregate expenditures.
Aggregate demand can be broken down into three main components: personal consumption (C),
private investment (I), and government expenditures (G). The relationship can be summed up
with this formula: AD = C + I + G. If Aggregate Demand is strong, the economy will be strong.
However, if Aggregate Demand falters, businesses will end up with large unsold inventories and
will cut back on production to avoid surpluses in the future. As they cut back they will of course
need fewer inputs—including labor—and high unemployment will result.

The culprit in this story, the element that throws the entire system out of whack, is private
investment. Private investment consists of business expenditures on machines, buildings,
factories, and so on. In other words, investment is capital formation. Keynes claimed that private
investment is inherently unstable due to what he called the “animal spirits” of
businessmen/capitalists. He believed that businessmen are ultimately irrational and prone to
herd-like behavior. Like sheep that blindly follow other sheep in the herd, it is easy for
businessmen to become “irrationally exuberant”—as well as irrationally lethargic. Investment
lethargy would trigger a large decrease in private investment, thus decreasing aggregate
expenditures and triggering an economic downturn.
--Ivan Pongracic, Jr, The Great Depression According to Milton Friedman
George Baily represents the 'private investment' part of the Keynes' equation. Had he jumped off
the bridge, the picture of Bedford Falls as "Pottersville" might have come true. I see Pottersville
whenever I see Wal-Mart come to town to put the locals out of business. It required an
intervening angel to save Bedford Falls from its fate at the hands of a greedy banker. Like John
Maynard Keynes, we wonder: who will save "capitalism from itself”? Where is our guardian
angel?

It seems an extraordinary imbecility that this wonderful outburst of productive energy [over 1924-
1929] should be the prelude to impoverishment and depression. Some austere and puritanical
souls regard it both as an inevitable and a desirable nemesis on so much over expansion, as they
call it; a nemesis on man's speculative spirit. It would, they feel, be a victory for the mammon of
unrighteousness if so much prosperity was not subsequently balanced by universal bankruptcy.
We need, they say, what they politely call a 'prolonged liquidation' to put us right. The liquidation,
they tell us, is not yet complete. But in time it will be. And when sufficient time has elapsed for the
completion of the liquidation, all will be well with us again.
I do not take this view. I find the explanation of the current business losses, of the reduction in
output, and of the unemployment which necessarily ensues on this not in the high level of
investment which was proceeding up to the spring of 1929, but in the subsequent cessation of
this investment. I see no hope of a recovery except in a revival of the high level of investment.
And I do not understand how universal bankruptcy can do any good or bring us nearer to
prosperity... [p. 349].

While some part of the investment which was going on in the world at large was doubtless ill
judged and unfruitful, there can, I think, be no doubt that the world was enormously enriched by
the constructions of the quinquennium from 1925 to 1929; its wealth increased in these five years
by as much as in any other ten or twenty years of its history... [p. 347].

Doubtless, as was inevitable in a period of such rapid changes, the rate of growth of some
individual commodities [over 1924-1929] could not always be in just the appropriate relation to
that of others. But, on the whole, I see little sign of any serious want of balance such as is alleged
by some authorities. The rates of growth [of different sectors] seem to me, looking back, to have
been in as good a balance as one could have expected them to be. A few more quinquennia of
equal activity might, indeed, have brought us near to the economic Eldorado where all our
reasonable economic needs would be satisfied... [pp. 347-48].>
--John Maynard Keynes, The General Theory and After: Part I, Preparation; Collected Writings of
John Maynard Keynes, vol. 13, pt. 1, Donald Moggridge, ed., (Cambridge, U.K.: Cambridge
University Press).

I should not be surprised to learn that the FBI considered 'It's a Wonderful Life' to be subversive
in their view. The FBI reported that it "...attempted to discredit bankers by casting Lionel
Barrymore as a 'scrooge-type' so that he would be the most hated man in the picture. This,
according to these sources, is a common trick used by Communists." So?

There is submitted herewith the running memorandum concerning Communist infiltration of the
motion picture industry which has been brought up to date as of May 26, 1947....
In addition, [redacted] stated that, in his opinion, this picture deliberately maligned the upper
class, attempting to show the people who had money were mean and despicable characters.
[redacted] related that if he made this picture portraying the banker, he would have shown this
individual to have been following the rules as laid down by the State Bank Examiner in connection
with making loans. Further, [redacted] stated that the scene wouldn't have "suffered at all" in
portraying the banker as a man who was protecting funds put in his care by private individuals
and adhering to the rules governing the loan of that money rather than portraying the part as it
was shown. In summary, [redacted] stated that it was not necessary to make the banker such a
mean character and "I would never have done it that way."

[redacted] recalled that approximately 15 years ago, the picture entitled "The Letter" was made in
Russia and was later shown in this country. He recalled that in this Russian picture, an individual
who had lost his self-respect as well as that of his friends and neighbors because of
drunkenness, was given one last chance to redeem himself by going to the bank to get some
money to pay off a debt. The old man was a sympathetic character and was so pleased at his
opportunity that he was extremely nervous, inferring he might lose the letter of credit or the
money itself. In summary, the old man made the journey of several days duration to the bank and
with no mishap until he fell asleep on the homeward journey because of his determination to
succeed. On this occasion the package of money dropped out of his pocket. Upon arriving home,
the old man was so chagrined he hung himself. The next day someone returned the package of
money to his wife saying it had been found. [redacted] draws a parallel of this scene and that of
the picture previously discussed, showing that Thomas Mitchell who played the part of the man
losing the money in the Capra picture suffered the same consequences as the man in the
Russian picture in that Mitchell was too old a man to go out and make money to pay off his debt
to the banker..
--To: The Director [FBI], D.M. Ladd, COMMUNIST INFILTRATION OF THE MOTION PICTURE
INDUSTRY

The FBI may have been correct to believe 'It's a Wonderful Life' to be 'subversive'. Indeed!
Capra's great film was subversive of the right wing reduction of human beings to mere 'economic
units' in a right wing machine in which an increasingly tiny elite alone --Mr Potters --benefit. The
difference is that in an FBI version of 'It's a Wonderful Life', George Bailey would have jumped off
the bridge.

I believe that it is the FBI that is subversive of our most precious freedoms guaranteed us in the
Bill of Rights! It is the FBI that is subversive of the intentions of James Madison who wrote our Bill
of Rights, subversive of the intentions of those brave patriots who were willing to hang in order
order to secure those rights. What has the FBI to say about that? That the FBI would think a
classic film 'subversive' I find subversive! I would suggest the FBI shut up with respect to those
"freedoms" that are guaranteed us by law!! I wonder if the FBI would like to debate that topic with
me.

From an online reader review of "It's a Wonderful Life".

I've always thought that the reason It's A Wonderful Life has enjoyed such enduring popularity is
that more than any other film it shows what us clearly and poignantly what can be the value of a
single individual and the contribution to the greater good that almost everyone can make. 

George Bailey as portrayed by James Stewart is the kind of "every man" hero with whom all us
can identify. He had every day problems to be sure, raising and providing for a family, but he had
even bigger problems. Fate has made him the rallying point of opposition in his small town of
Bedford Falls to the "richest and meanest man in town", embodied in Lionel Barrymore.

It's a real David vs. Goliath battle. Barrymore seems to have unlimited resources at his disposal.
Samuel S. Hinds as Peter Bailey put it so well to him in asking what are you doing all this for?
Barrymore does have more money than he could ever possibly use. A little charity wouldn't hurt
him.

Remember the basic plot outline. A whole lot of people in Bedford Falls one post World War II
Christmas Eve see that their friend George is toting a heavy load of mysterious origins. Their
prayers reach the heavens where an angel is dispatched to aid.

But before Henry Travers the angel arrives, he's given the story of George Bailey's life. And we
see the kind of struggles he's had, the sacrifices he's made for the good of a whole lot of others.
We've also seen a greedy and grasping Potter, grabbing everything that George Bailey cannot
save.

Something happens that day before Christmas through no fault of his own, Bailey is in big trouble.
It's driven him to the brink of despair. That's why the angel is sent down. He shows him the
alternate universe that would have been had he never existed. It's something each and every one
of us should try to do, step outside ourselves see just what our contributions can be.

But I think what Frank Capra is trying to say in this greatest of his films is that having done that
and we realize we haven't contributed to the greater good of humankind, we resolve to do so. It's
a simple, but profound lesson.

What if Potter got the same opportunity? In a sense Charles Dickens did just that in A Christmas
Carol. Would Lionel Barrymore change? It's an interesting point of speculation.

In addition to those cast members already mentioned a whole group of players who worked with
Capra before grace this film. Add to that some others and you have a perfectly cast feature
picture.

Donna Reed has an interesting part as well. Your choice of mate is real important in life. Had she
not been as loving and supportive to George Bailey, he might very well have taken a different
route in life. Mary Hatch Bailey became a signature part for her, more identified than her role in
From Here to Eternity which got her an Oscar. It certainly was the basis for her TV series.

When Todd Karns who plays Harry Bailey toasts his brother he's saying that the riches of the
world are not necessarily things that can be quantified. Your life is not measured in material
things, but in how you use the material things given you.

And that universal lesson will be taught into eternity as long as It's A Wonderful Life is shown
every year. Wouldst we all learn it.

1.) Summarize It’s a Wonderful Life from the review in the first three paragraphs.

2.) Why was the FBI suspicious of Capra and the film being subversive in the years
following WWII?

3.) Explain, based on this review, how Capra portrayed the wealthy and why this
was deemed negative by the US government.

4.) Keynes blames capitalists themselves for the failing economy during the Great
Depression. In this way, what would Keynes have thought about George’s situation
of his bank failing in It’s a Wonderful Life? Explain.
5.) If Potter is the capitalist, and George Bailey is the “private investor,” according to
the article, what would have ultimately happened to the economy of Bedford Falls if
George had jumped off the bridge? Explain.

6.) According to the article (and the FBI), what was the overall message of It’s a
Wonderful Life?

Viewing Questions for

It’s a Wonderful Life (1947)

DIRECTIONS: Answer the following questions after completion of viewing It’s

a Wonderful Life in short answer version (6-9 lines).

1.) What is the significance of the opening scene when prayers for George Bailey rise
to heaven? Explain how this foreshadows what may happen later in the film.

2.) “If you’re going to help a man, you ought to know something about him,” explains
Joseph to Clarence. Explain why this statement is significant during the era
surrounding the Great Depression.

3.) In 1919, George has to save his brother Harry after he falls beneath the ice of the
frozen pond, causing him to lose his hearing in his left ear. What does this show
about George’s personality?

4.) Potter explains that “Ideals without common sense can ruin this town.” Potter is
in a wheelchair. Explain who you think Capra is comparing Potter to in an American
historical sense and what the commentary of this line is in terms of America during
the late 1930s (late Great Depression).

5.) Uncle Billy has a raven for a pet. What is the symbolism for this?

6.) Explain what bank runs were during the early 1930s and what happens to
Bailey’s Building and Loans on George and Mary’s wedding day. How do George and
Mary solve the problem? Why is this significant?

7.) What is the significance of George and Mary purchasing their broken-down
dream home and slowly fixing it up? Explain why this is significant both to the story
of the film and the overall message of the Great Depression.

8.) If Potter’s slums (Potter’s Field) represent Hoovervilles and Depression poverty,
what does Bailey Park represent?

9.) What do you notice about Christmas traditions in 1947?

10.) What events lead to George contemplating suicide?

11.) What would have happened in Bedford Falls if George had never been born?

12.) What is the overall message Capra is trying to convey to audiences about their
lives during the 1930s and 1940s based on George’s experiences “not existing?”

13.) Why is it significant that the town gathered together to help George and the
Building and Loan to come up with the $8000 to save the bank? Explain how this is
an allegory for America during the Great Depression and WWII.

14.) According to Capra, what would happen to society if the economy was simply
left to selfish capitalism? Use Pottersville after George committed suicide in your
explanation.

15.) If the film was considered by the FBI, US government, and MPPDA to be anti-
American during a time of great suspicion, why did they include the montage of
George, Mary, and Bedford Falls during WWII?

16.) Even though Sam Wainwright offered George a share in the plastics business,
which made him extremely wealthy, George turned him down. Is George happy even
though he is not a “wealthy” man? Why does Harry call George the “richest man in
town” during the Christmas party? What does George find his “wealth” in? What
message is Capra trying to send to audiences?

17.) Tradition holds that rain on one’s wedding day can be considered bad luck for
the marriage. Explain the significance of George and Mary’s rainy wedding day to
the rest of the film.

18.) Explain what Capra thinks about capitalism based on the film’s message. Use
evidence to support your answer.

19.) Does George achieve the American Dream? Explain.

20.) Explain how the conflict between George Bailey and Mr. Potter is representative
of the Cold War.

21.) Explain how the film shows different cultural implications and historical events
of the United States from 1919-1940s.

22.) Throughout his life, George experiences a number of hardships: losing his
hearing after saving Harry, working for the abusive Mr. Gower, giving up his dream
for college to run Building and Loans, giving up the honeymoon money to save the
bank, and almost losing the bank when his uncle loses $8,000 to Mr. Potter. What
message is Capra trying to give to audiences regarding the of the film, It’s a
Wonderful Life, and the overall theme?