The Case of The Missing Deposit:

What about that banking issue? When he returns to the “real” Bedford Falls, George is saved by his friends, who open their wallets to cover an $8,000 shortfall at his savings and loan brought about when the evil Mr. Potter snatched a deposit mislaid by George’s idiot uncle, Billy (Thomas Mitchell).

But isn’t George still liable for the missing funds, even if he has made restitution? I mean, if someone robs a bank, and then gives the money back, that person still robbed the bank, right?

I checked my theory with Frank J. Clark, the district attorney for Erie County upstate, where, as far as I can tell, the fictional Bedford Falls is set. He thought it over, and then agreed: George would still face prosecution and possible prison time.

“In terms of the theft, sure, you take the money and put it back, you still committed the larceny,” he said. “By giving the money back, you have mitigated in large measure what the sentence might be, but you are still technically guilty of the offense.”

He took this a bit further: “If you steal over $3,000, it’s a D felony; 2 ½ to 7 years is the maximum term for that. The least you can get is probation. You know Jimmy Stewart, though, he had that hangdog face. He’d be a tough guy to send to jail.”

Wait a second.  With all due respect to the District Attorney for Erie County, Jimmy Stewart/George Bailey didn't steal anything.  The Bailey Building and Loan, through one of its employees (Uncle Billy), lost the $8,000 bank deposit.  Losing money isn't a crime. 

I suppose their argument is that the criminal charge of theft could still be pinned on Stewart, even though we (the audience) know he is innocent and the money was merely lost.  

But again, they're wrong.  First of all, it wouldn't be "theft", it would be "embezzlement" (that's when you steal from your own company).

And secondly, what evidence would there be that George embezzled the funds?  Certainly, the doddering Uncle Billy would testify that he lost the money (and there are witnesses, like the bank teller, who will back that up).  And where did that money go?  Where did George spend it?  Any evidence?  Certainly George didn't put it into refurbishing the house; the banister knob won't even stay on.  So it's a thin case. 

Bottom line: Any indictment against George just wouldn't stick.  A judge would throw it out before it even gets to trial.

Now, as a fiduciary overseer of the Bailey Buliding and Loan, George may be liable for a civil suit brought by the B&L depositors, investors and shareholders, even if the "fault" for the monetary loss was Uncle Billy's.  But that issue was laid to rest when the whole town ponied up and replaced the "missing" money.  Put simply, the depositors were "made whole" and suffered no loss.

I'll tell you who is potentially screwed criminally, and that's Potter.  Potter stole the money.  Yeah, Uncle Billy mislaid it, but Potter discovered it (within mere seconds after it was mislaid) and Potter knew what it was.  And rather than return it, he kept it. 

You remember the sequence: Uncle Billy goes into the bank with the envelope containing the deposit.  He sees Potter.  He takes Potter's newspaper and reads the headline which boasts about Harry Bailey being a war hero (tweaking Potter a little bit).  He returns the newspaper to Potter and walks away to the bank teller.  Potter opens the newspaper and discovers that Uncle Billy inadvertently gave him the envelope (containing the deposit money) with the newspaper.  And Potter, ever scheming, says nothing.  Does nothing.  And keeps the money. 

Sorry, but that's theft.

Which makes the SNL "alternate ending" very befitting:

(fade in to clips from the film of the famous "You are now entering Bedford Falls" sign, as well as the equally famous shots of the Christmas-lit streets of Bedford Falls. Cut to the Bailey home, where the good citizens have convened to rally behind their neighbor George Bailey in his time of need. As we fade in, we see Ernie emptying a basket full of cash onto the table as George and his family look on in awe.)

Mary Bailey: They've been coming all evening. They didn't ask any questions – all they said was, "if George Bailey needs help, we're here to help him!"

George Bailey: (holding Zsu-Zsu in his arms) Wh-wh-why Mary–I never realized I had so many friends! A-a man wh-who has a friend is a rich man, that's what Clarence said, and by golly he was right!

Dave: I wouldn't have a roof over my head if it wasn't for you, George!

George Bailey: Thanks, Dave! Thank you!

(George's brother Harry Bailey, dressed in his airline pilot's uniform, makes his way through the crowd)

Harry Bailey: 'Scuze me! Pardon me–Hello George, how are you?

George Bailey: Harry! Welcome home, Harry!

Harry Bailey: Thanks, Merry Christmas, George! (to the crowd) Now wait a minute, everybody! I got a telegram here I wanna read–from London! (reads) "Dear George. Stop. Mr Gower cables you need cash. Stop. My office instructed to advance you up to $8000. Stop. (crowd reacts) Hee-haw and Merry Christmas! Sam Wainwright"!!!

(crowd cheers and everyone breaks into a joyous rendition of "Hark the Herald Angels Sing".)

Crowd: (singing)
"Hark! the herald angels sing
Glory to the new-born King
Peace on earth and mercy…."

(Uncle Billy is heard offstage, screaming–"George! George!", before finally bursting into the room. He has a string tied around his finger)

Uncle Billy: Quiet everyone! I remembered! I remembered what I did with the money–the $8000!

George Bailey: Why that's great, Uncle Billy! What did you do with it?

Uncle Billy: (frantic) I was in the bank–I had it in a newspaper–I remember giving it to someone!

George Bailey: Well, who? Who'd you give it to?

Uncle Billy: No, wait! I just called Clarence at the bank. He told me that Old man Potter deposited $8000 right after I left! IT WAS HIM!!!

(crowd is outraged)

George Bailey: Well–what're we waitin' for? Let's go get him!

Crowd: Yeah!!!

(background music changes from bright and Christmas-y to dark and ominous, as the bloodthirsty citizens of Bedford Falls make thier way to Potter's office.)

(cut to Potter's office. Potter looks out his window to see the baseball bat and crowbar-wielding mob arriving at his door–which they proceed to batter to pieces with thier weapons. An angry George appears in the doorway)

Mr. Potter: Stay where you are, George Bailey, you're in enough trouble already…

George Bailey: You made one mistake, Mr. Potter: you double-crossed me and you left me alive!

Mr. Potter: Now, wait just a second–I'll give you the money back!

George Bailey: I don't want the money–I want a piece of you, Potter! (tips Potter's wheelchair over, spilling him onto the floor. George then begins kicking him ferociously) You think the whole world revolves around you and your money–well it doesn't, Mr. Potter! In the whole vast configuration of things, you're nothing but a scurvy little spider!

(The mob gasps in amazement as Potter pulls himself off the floor and onto his feet)

George Bailey: Why, you're nothing but a fraud! You're not even a cripple!

Mr. Potter: Now wait a second–I can explain this!

George Bailey: Harry! Mary! Hold him for me!

(Harry and Mary comply, each grabbing an arm as George pounds Potter repeatedly in the gut. A final punch to the jaw sends Potter sailing over his desk. George goes to the back of the desk and drags "Potter"–now a stuffed dummy–back around for more punishment).

George Bailey: I'm not through with you, Potter! Harry–Mary–have a piece of this!

Mary Bailey: Yeah, baby–you know it!

(she pounces on "Potter", punching him in the head and body. Harry gets a few kicks in. George does a WWF-style, elbow-drop onto the hapless "Potter". He then picks him up and throws him against a wall. Mary, Harry, and George each grab crowbars and/or 2x4s and proceed to bludgeon "Potter", as Uncle Billy leads the mob in a few bars of "Auld Lang Syne":)

Mob: (singing)
"Should old acquaintence be forgot
And never brought to mind
should old acquaintence be forgot
and days of auld lang syne!"

(Harry, Mary, and George continue to beat "Potter" to a pulp, as the movie fades out, and "The End" card from the movie flashes on the screen.)

So the idea that Jimmy Stewart/George Bailey would have faced "gotten 2-1/2 to 7 years" is just plain wrong.  And even if the townspeople hadn't come forth with the missing money, Bailey would have just gotten a no-strings-attached government bailout.  I mean, isn't that what you do – in the real world – when your financial institution is undermarginalized and contains toxic assets?

I will agree with one thing in the article: the alternate-universe Pottersville looked like a hell of a lot more fun than dreary Bedford Falls, and one wonders why Jimmy Stewart, who longed for the bright lights his whole life, didn't warm up to it.