Walt Disney on Crisis Response

Dumbo, released October 23, 1941, was produced to recoup the losses of Pinocchio and Fantasia, and its creation was a deliberate pursuit of simplicity and economy. At sixty-four minutes it is among the studio's shortest animated features. The story, created by Helen Aberson and Harold Pearl with illustrations by Helen Durney for a novelty toy prototype, follows an elephant ridiculed for his oversized ears who discovers he can fly by using them as wings; his sole companion besides his mother is Timothy the mouse, a relationship parodying the old antagonism between their species. The film met critical acclaim for its story, humor, visuals, and music, and won the Academy Award for Best Scoring of a Musical Picture. One voice was synthesized using the Sonovox system, an early experiment in processed vocal sound. In 2017 the Library of Congress selected Dumbo for the National Film Registry, and the character became a durable merchandising and theme park property, later adapted as a live-action feature.

Bambi had its world premiere in London on August 9, 1942, the first Disney film to debut abroad, and opened in American theaters five days later. Released during the Second World War, it did not perform as well as hoped; Roy Disney wired his brother after the New York opening that the film had fallen short of the studio's holdover figure and that night business was the problem. It earned RKO theatrical rentals of $1.27 million in the United States and Canada, and with European markets largely closed by the war, international rentals of $1.685 million brought the initial worldwide total to $2.955 million, the studio's third highest to that point behind Snow White and Pinocchio. The property compounded across re-releases in 1947, 1957, 1966, 1975, 1982, and 1988, eventually passing one hundred million dollars in cumulative North American rentals. The film was loosely based on Felix Salten's 1923 novel, whose European roe deer became a white-tailed deer for American audiences after illustrator Jake Day's argument, and it received Oscar nominations for sound, song, and score.

By 1947 Walt Disney Productions was over four million dollars in debt and, having lost its European markets to the war and absorbed the commercial failures of Pinocchio, Fantasia, and Bambi, stood on the verge of bankruptcy. Disney and his animators returned to feature production in 1948 after a string of inexpensive package films, choosing Charles Perrault's Cinderella as the comeback vehicle. Released February 15, 1950, the film drew critical acclaim, became the studio's biggest hit since Snow White, and helped reverse its fortunes. It received three Academy Award nominations, among them its score, its sound recording, and its original song Bibbidi-Bobbidi-Boo, and it was followed by two direct-to-video sequels and a 2015 live-action remake; the Library of Congress selected it for the National Film Registry in 2018. The rescue established the pattern of the studio's decade: one animated tentpole whose theatrical, music, and merchandising returns underwrote the riskier ventures in television and theme parks that Walt increasingly favored.

In early 1941, before American entry into the Second World War, the State Department commissioned a Disney goodwill tour of South America under the Good Neighbor Policy, because several Latin American governments maintained close ties with Nazi Germany and Disney characters were enormously popular in the region. Nelson Rockefeller, the newly appointed Coordinator of Inter-American Affairs, facilitated a journey that took Disney and roughly twenty composers, artists, and technicians through Brazil, Argentina, Chile, Bolivia, and Peru. The resulting film, Saludos Amigos, premiered in Rio de Janeiro on August 24, 1942, mixing live-action travel footage with four animated segments starring Donald Duck, Goofy, and the newly created Brazilian parrot José Carioca. The production carried federal loan guarantees, granted because the studio had overexpanded just as European markets closed and labor unrest drained its finances. The film succeeded, launched Donald Duck's international popularity, prompted the 1944 government-funded sequel The Three Caballeros, and surprised American viewers with documentary images of modern Latin American cities.

Universal and Winkler renewed the Oswald arrangement in February 1928, but Disney feared Mintz would not renew it again, partly because Iwerks had warned him that Mintz's men were quietly hiring away his animators during print pickups. Disney traveled to New York with his wife to negotiate better terms and was told to accept a twenty percent cut. Most of his fellow animators left for Mintz's studio, and Disney quit working on the Oswald cartoons entirely. On the long train ride home he resolved to create another character and, decisively, to retain the rights to it. He and Iwerks developed the new cartoon in secret, and the first Mickey Mouse film, Plane Crazy, was produced as a silent in summer 1928 and held back from release; Steamboat Willie, with a synchronized soundtrack, reached theaters that fall and became a major hit that eclipsed Oswald. Universal head Carl Laemmle later terminated Mintz and gave the series to Walter Lantz, with whom Disney maintained a friendly rivalry for the rest of his life.

Laugh-O-Gram's fatal blow came from its distributor. The studio secured a contract for six shorts with Pictorial Clubs of Tennessee, but the distributor paid only a small advance before going bankrupt, and the loss of income crippled the studio. Disney lived in the office and bathed weekly at Union Station while the payroll went unpaid. A final commission, a dental hygiene film called Tommy Tucker's Tooth, funded production of Alice's Wonderland, a live-action and animation hybrid designed as a last-resort franchise to save the company. Instead the studio filed for bankruptcy in July 1923, and Disney sold his movie camera and moved to Hollywood carrying an unfinished reel of Alice's Wonderland as his only asset. He later recalled that the idea for Mickey Mouse traced to a tame mouse he kept at his desk in Kansas City. A nonprofit organization, Thank You, Walt Disney, has since worked to restore the derelict McConahay Building.

The next day, May 29, 1941, more than two hundred staff members struck during the production of Dumbo, against the advice of Sorrell, who wanted more time to organize. During the stoppage Disney retaliated by caricaturing striking employees in Dumbo as the antagonistic circus clowns who demand their pay, and studio guards once stopped him from confronting Babbitt on the picket line. The pickets kept a carnival atmosphere, at one point marching a mock guillotine to behead a mannequin of Disney's attorney, Gunther Lessing, while unionized staff at Technicolor and Pathé refused to process Disney films and the League of Women Shoppers picketed theaters exhibiting them. Disney was absent for the resolution, having accepted the State Department's Coordinator of Inter-American Affairs offer to make a goodwill trip to South America. Pressed by the National Labor Relations Board, the settlement reinstated fired employees, equalized pay, clarified the salary structure, and created a grievance procedure. The strike left the studio with 694 employees, and departed animators including Bill Tytla, Walt Kelly, and Tyrus Wong seeded rival studios and United Productions of America.

Disneyland was dedicated on Sunday, July 17, 1955, at an International Press Preview televised nationwide on ABC and anchored by Art Linkletter, Bob Cummings, and Ronald Reagan. Although 28,000 people attended, only about half were invitees; the rest used counterfeit tickets or climbed over the fence. Guests tripped over television cables on a very hot day while rides broke down, restaurants ran out of food and drinks, the doors of Sleeping Beauty Castle were left unlocked to reveal its empty shell, and the Mark Twain Riverboat was overloaded with passengers. The press dubbed the day Black Sunday, and during the lifetimes of Walt and Roy, July 17 was considered a preview, with July 18 the official opening. The problems proved transient. Disneyland went on to the largest cumulative attendance of any theme park in the world, with 757 million visits through the end of 2021, and it drew 17.33 million visitors in 2024, second worldwide only to the Magic Kingdom it inspired.

The Mickey Mouse and Silly Symphony series succeeded, but Disney and Roy concluded that Pat Powers, whose Cinephone system had recorded their early sound cartoons, was withholding their rightful share of the profits. Disney asked Powers for higher payments in 1930 while urging Iwerks to speed production by drawing only key poses and letting assistants supply the inbetween drawings. Powers refused and instead signed Iwerks away to run cartoons under his own banner; the composer Carl Stalling resigned soon after, and Disney suffered a nervous breakdown in October 1931, which he blamed on overwork and Powers's business tactics. He and Lillian recuperated on an extended trip through Cuba and Panama. The loss of his closest collaborator and his chief distributor pushed the studio toward Columbia Pictures for distribution and left Disney permanently wary of intermediaries who stood between his studio and its audience.

Pinocchio and Fantasia both lost money after their 1940 releases, partly because European revenues collapsed when war broke out in 1939, and by the end of February 1941 the studio carried dangerous debts. Disney and Roy answered the crisis by starting the company's first public stock offering in 1940, making Walt Disney Productions publicly held years before most studios, and by implementing heavy salary cuts across the payroll. The cuts, combined with what staff experienced as Disney's high-handed and insensitive manner, precipitated the 1941 animators' strike. The strike and the company's financial state drove several animators to leave and found United Productions of America, and Disney's relationships with much of his staff were permanently strained. The crisis marked the moment the founder's perfectionism collided with the arithmetic of a public company, a tension he never fully resolved across the remaining twenty-five years of his life.