Local View: Wonderful life? Looks more like old-man Potter won

From the column: "Unfortunately, relying on the existence of people who are willing to fight and sacrifice for others is not sustainable in a culture that rewards excessive individualistic profit-making above all else."

Dave Whamond / Cagle Cartoons

On the evening of Friday, Dec. 20, 1946, “It’s a Wonderful Life” was screened for the very first time in public at the Globe Theater (now the Lunt-Fontanne Theater) in New York City. The world premiere was a preview charity event for the Boys Club of New York. Over the last 75 years this production has evolved into one of the most popular holiday film classics in American history.

A key element in the movie is the Bailey Brothers Building and Loan Association. George Bailey becomes a hero to Bedford Falls by saving this institution twice from Henry Potter, the miserly robber baron of the town. The first time George saves the building and loan, he does so by convincing the board of directors that the town needs the institution so people would not have to crawl to Potter for a loan.

Potter wants to dissolve the building and loan because he feels that giving home-ownership loans to members of the working class is a waste of funds. He states, “What does that get us? A discontented, lazy rabble instead of a thrifty working class.” George responds by saying, “This rabble you're talking about … they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?”

Building and loan associations were created in 1831 in the United States. The basic idea was to have people in the lower and working classes pool their money so they could take turns getting loans to buy houses. For over 100 years, building and loan associations flourished in the United States, and the dream of homeownership was realized by millions who otherwise wouldn’t have.

In “It’s a Wonderful Life,” the second time George saves the Bailey Brothers Building and Loan Association is during the Great Depression. After a run on the bank, depositors at the building and loan also want their money. Potter offers to buy their shares for 50 cents on the dollar.


With the help of his wife Mary and the $2,000 they saved for their honeymoon, George is able to save the building and loan by giving short-term loans to its members so they can weather the bad economic times. In this heroic scene, George explains how the building and loan benefited everyone in the community. He said, “You’re thinking of this place all wrong. As if I had the money back in a safe. The money’s not here. Your money’s in Joe’s house … right next to yours. And the Kennedy house, and Mrs. Macklin’s house, and a hundred others. Why, you’re lending them money to build, and then they’re going to pay it back to you as best they can.”

At the beginning of the Great Depression, there were more than 11,700 building and loan associations. By 1946, however, there were just over 6,000. Additionally, they were transformed from locally owned and controlled associations to federally chartered institutions whose deposits were insured by the federal government. As they morphed into a new form of institution, a new name for them followed. After the 1940s, they became known as savings and loan associations.

The number of savings and loan associations remained stable from 1946 until the 1970s, with about 5,669 remaining in 1970. Unfortunately, their decline then accelerated, and their fate was sealed by the savings and loan crisis of 1985 to 1996. In those years, about one-third of the remaining savings and loan associations failed. By the late 1990s, only a little more than 2,000 associations remained.

Many people in the financial industry blamed the failure of building and loan associations in the 1930s and the failure of savings and loan associations in the 1980s and 1990s on the inability of these institutions to focus on making money. It was said they cared more about their members than making profit. In a sense, their organizational structure was inspired by the selfless nature of people like George Bailey.

Through self-sacrifice and a great deal of pain, George Bailey was able to save the Bailey Brothers Building and Loan Association twice. He was able to defeat his arch nemesis Henry Potter and protect the interests of the members of the association.

Unfortunately, relying on the existence of people who are willing to fight and sacrifice for others is not sustainable in a culture that rewards excessive individualistic profit-making above all else.

Today, only 659 savings and loan associations remain in the U.S. Most are more like banks. Due to shortsighted government regulation, deregulation, and re-regulation, the main focus has shifted from a mutual financial help association to a strictly profit-making institution.

So, the next time we watch “It’s a Wonderful Life,” we can take stock and realize the greed-filled, selfish values of old-man Potter have won out over the community-based values of George and Mary Bailey.


Dave Berger of Plymouth, Minnesota, is a retired sociology professor who taught for nearly three decades at Inver Hills Community College. He also is a regular contributor to the News Tribune Opinion page.

Dave Berger.jpg
Dave Berger

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