When 'It's a Wonderful Life' Came Under FBI Scrutiny

Thanks in part to a 1974 copyright lapse that opened the door to repeated television broadcasts, It’s a Wonderful Life has become a heartwarming holiday movie staple. Frank Capra’s 1946 classic follows downtrodden protagonist George Bailey, played by Jimmy Stewart, a struggling family man who contemplates suicide on Christmas Eve—until his guardian angel shows him how much worse the world would be without him.

Often hailed as a quintessentially American Christmas movie, the story blends small-town patriotism with seasonal cheer. But in a 1947 report, two informants warned Federal Bureau of Investigation (FBI) Director J. Edgar Hoover that It’s a Wonderful Life carried subtle anti-American propaganda—particularly in its harsh portrait of the miserly banker Henry Potter.

Emerging Cold War paranoia gave these suspicions traction. The FBI report on the now-beloved motion picture foreshadowed the coming House Un-American Activities Committee (HUAC) investigations and the Hollywood blacklists that swept the industry in the 1940s and 1950s, purging movie studios of suspected communists.

Years before the Cold War ignited the Red Scare, Hoover worried that the roughly 85 million Americans who flocked to movie theaters each week were unknowingly ingesting communist propaganda with their popcorn and Raisinets. During World War II, the U.S. Office of War Information had asked studios to produce pro-Soviet movies to support America’s wartime alliance. Hoover feared Hollywood had embraced that mission too enthusiastically.

Government officials understood film’s persuasive power. “In World War II, Hollywood was conscripted to make propaganda for the war effort,” says Vaughn Joy, author of Selling Out Santa: Hollywood Christmas Films in the Age of McCarthy. Capra himself oversaw the First Motion Picture Unit, which produced wartime propaganda like the Why We Fight series. After the war, says Joy, officials increasingly worried about how easily movies could sway public attitudes—and whether communist ideas might slip in unnoticed.

By 1942, the FBI was investigating Hollywood labor unions, reporting that nearly half were influenced by the Communist Party. Over the next 16 years, the bureau’s Los Angeles field office expanded its surveillance to track filmmakers’ political ties and even analyzed movie content with help from secret industry informants.

The FBI leaned on a pamphlet called Screen Guide for Americans, written in 1947 by novelist Ayn Rand, who had fled the Soviet Union before becoming a Hollywood screenwriter. Published by the conservative Motion Picture Alliance for the Preservation of American Ideals (MPAPAI), Rand’s guide argued that communists preferred not to make overtly political movies. Instead, she warned, they would introduce “small, casual bits of propaganda into innocent stories,” to subtly spread their collectivist ideas.

According to Rand, hallmarks of “subversive” material included negative portrayals of businessmen and wealthy people, along with the overly sympathetic depictions of the “common man” and the collective. Using these standards, the FBI reviewed more than 200 movies through the 1950s. generating a series of reports entitled “Communist Infiltration of the Motion Picture Industry.”

Informants panned Capra’s 1939 film Mr. Smith Goes to Washington as “decidedly socialist” and reported that films like Mission to Moscow (1943) and The North Star (1943) sanitized grim Soviet living conditions. The report noted that the 1943 movie Keeper of the Flame subtly equated fascism and Americanism, adding that star Katharine Hepburn “has been associated with communist-inspired or -directed activities in the Hollywood area.” Informants skewered the 1946 Oscar-winning film The Best Years of Our Lives for scenes in which a cigar-puffing businessman takes the seat of a returning veteran—who also loses his job after a national chain buys his hometown pharmacy. Even light comedies like Abbott and Costello’s Buck Privates Come Home were flagged for supposedly stirring class resentment.

Through this lens, FBI informants viewed It’s a Wonderful Life as potentially subversive. Using Rand’s criteria, they argued that the character of banker Mr. Potter, described by George Bailey as an “old money-grubbing buzzard,” unfairly villainized bankers and the upper class.

“This picture deliberately maligned the upper class" … as "mean and despicable,” the FBI argued. “The film represented a rather obvious attempt to discredit bankers by casting Lionel Barrymore as a ‘scrooge-type’ so that he would be the most hated man in the picture.”

One informant even suggested rewriting the character to emphasize that he was responsibly safeguarding other people’s money. In their view, George Bailey appeared less like a community hero and more like anti-capitalist challenger to the town’s tycoon. “A subtle attempt was made to magnify the problems of the so-called ‘common man’ in society,” the FBI warned.

The bureau also targeted the film’s credited screenwriters, husband-and-wife team Frances Goodrich and Albert Hackett, saying they “practically lived with known communists and were observed eating luncheon daily” with two communist screenwriters. It failed to mention, however, that Dalton Trumbo, who penned an early version of the script, and several uncredited script contributors—including Albert Maltz, Michael Wilson and Clifford Odets—were current or former Communist Party members.

Despite the informants’ report, HUAC ultimately took no action against the cast and crew of It’s a Wonderful Life. But the committee’s 1947 hearings led to the blacklisting of the so-called “Hollywood Ten”—including Trumbo and Maltz.

The Red Scare soon influenced the kind of Christmas movies studios produced. Joy notes that films from 1946-47, like It’s a Wonderful Life and Miracle on 34^th Street, often included themes of community, collective action or Charles Dickens-style social responsibility. Within a few years, she says, studios pivoted to lighter, “more individualistic plots that are far less serious films—musicals, comedies and romances,” avoiding anything that might be viewed as political.

Even Capra’s reputation suffered. Despite his distinguished service in both world wars, the FBI continued to scrutinize his work, and his 1948 drama State of the Union was accused of showing “a deep-seated dislike for most of the things America is and stands for.”

In the early 1950s, Capra lost his security clearance over suspicions tied to the film, Joy says. Though he vigorously defended his patriotism, his filmmaking career never regained its earlier stature.