It’s a Wonderful Life is a 1946 American Christmas fantasy comedy-drama film produced and directed by Frank Capra, based on the short story and booklet The Greatest Gift, which Philip Van Doren Stern wrote in 1939 and published privately in 1945.
On Christmas Eve 1945, in Bedford Falls, New York, George Bailey contemplates suicide. Prayers for him reach Heaven, where Clarence Odbody, Angel 2nd Class, is assigned to save George, in return for which he will earn his angel wings. To prepare him for his mission, Clarence is shown flashbacks of George’s life. The first is from 1919, when 12-year-old George saves his younger brother Harry from drowning at a frozen lake; George loses his hearing in one ear as a result. At his after-school job, George realizes that the druggist, Mr. Gower, distraught over his son’s death from the flu, has accidentally added poison to a child’s prescription, and intervenes to stop it from causing harm.
In 1928, George plans to leave on a world tour and then attend college. At Harry’s high-school graduation party, he is reintroduced to Mary Hatch, who has had a crush on him from childhood. Their walk home is interrupted by news that George’s father, Peter, has died of a stroke. George postpones his travel so he can sort out the family business, Bailey Brothers’ Building and Loan. Henry F. Potter, the richest man in town, wishes to dissolve the Building and Loan to eliminate it as a competitor. The board of directors votes to keep the Building and Loan open, on condition that George stay to run it (along with his absent-minded uncle Billy). George gives his college tuition to Harry on the condition that Harry take over the Building and Loan when he returns.
Four years later, Harry returns from college with a job offer from his father-in-law. George tells Harry to take the job, and he will keep running the Building and Loan. George and Mary get married. On their way to their honeymoon, they witness a run on the bank and use their honeymoon savings to keep the Building and Loan solvent until the bank re-opens.
Eventually, George establishes Bailey Park, a housing development with small houses financed by the Building and Loan, so that people can own their own homes, rather than paying rent to live in Potter’s overpriced slums. Potter attempts to lure George into becoming his assistant, offering him $20,000 (equivalent to $270,000 in 2017) a year; George is momentarily tempted, but rebukes him.
During World War II, George is ineligible for service because of his bad ear. Harry becomes a Navy pilot, and earns the Medal of Honor by shooting down a kamikaze plane headed for a troop transport. On Christmas Eve morning 1945, as the town prepares a hero’s welcome for Harry, Uncle Billy goes to the bank to deposit $8,000 of the Building and Loan’s cash. Potter enters, and Billy taunts Potter by grabbing the newspaper and reading the front-page headline about Harry aloud. Billy gives Mr. Potter his newspaper back, unintentionally wrapping the envelope with the cash in the newspaper. Billy discovers that he has misplaced $8,000 of the Building and Loan’s cash when the teller asks him for the cash to complete the deposit (equivalent to $110,000 in 2017). Mr. Potter discovers the envelope with the Building and Loan’s $8,000. He says nothing, knowing it will cause problems for the company. When a bank examiner arrives to review the Building and Loan’s records, George realizes that criminal charges are possible; he berates Uncle Billy, then goes home and takes out his frustration on his family. He soon apologizes to his wife and children, then leaves.
George desperately appeals to Potter for a loan. When George offers his life insurance policy as collateral, Potter, aware of the misplaced currency, says George is worth more dead than alive, and phones the police to have him arrested. George gets drunk at a local bar, and is involved in a fight before he leaves and goes to a nearby bridge, thinking of suicide. The film’s narrative catches up to the time of the opening scene. Before he can jump, Clarence dives into the river just before George does, causing George to rescue Clarence, rather than killing himself. George does not believe Clarence’s subsequent claim that he is George’s guardian angel.
When George says he wishes he had never been born, Clarence decides to grant his wish and show George an alternate timeline in which he never existed. Bedford Falls is named Pottersville, and is a less congenial place. Mr. Gower has recently been released from prison for manslaughter, because George was not there to stop him from putting poison in the pills. The Building and Loan has closed down, as George never took over after Peter’s passing.
George’s mother does not recognize him; she reveals that Uncle Billy was institutionalized after the collapse of the Building and Loan. In the cemetery where Bailey Park would have been, George discovers the grave of his brother. Clarence tells him all the soldiers on the transport died, as Harry was never there to save them, because George had never saved Harry from drowning. Mary, who works at the library, never married; when George says he is her husband, she screams for the police, causing George to flee and the local policeman to give chase.
George, now convinced that Clarence is really his guardian angel, runs back to the bridge and begs for his life back; the alternate timeline changes back to the original reality. George runs home to await his arrest. Mary and Uncle Billy arrive, having rallied the townspeople, who donate more than enough to cover the missing $8,000 and for Potter’s warrant to be torn up. Harry arrives and toasts George calling him “The richest man in town”. A bell on the Christmas tree rings, and his daughter recalls a story that says the sound means that an angel has just earned his wings, signifying Clarence’s promotion.