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Thursday, August 26, 2010

Walt becomes a businessman

Originally posted July 8, 2010

I know it’s been a couple of weeks since I last posted, but, my family prefers that I bring home a paycheck before indulging my other passions, and events at work and home have transpired to thwart my indulgences. Finally, I am back again at my keyboard.

Since Walt Disney was rejected by the Army because he was underage, he joined the Red Cross with the help of his Mother, and was sent to France for a year to drive an ambulance. Upon his return in 1919 to Kansas City, he had thoughts of becoming an actor or a newsprint artist. Walt’s artistic heart led him toward a career in newsprint drawing either political caricatures or comic strips; however, he was unable to find employment. His brother Roy, now working at a local bank, was able to find him a temporary position at the Pesmen-Rubin Art Studio where he created ads for newspapers, magazines, and movie theaters, and met Ubbe(Ub) Iwerks.

Having grown up in the household of a man (Elias, Walt’s Dad) who by all accounts fit that entrepreneurial mold, and move his family around a lot because of it, I’ve gotten the impression that Walt was really interested in pursuing the path for his career. However, when Walt’s and Ub’s work expired at Pesman-Rubin leaving them unemployed, they formed Iwerks-Disney Commercial Artists. Not yet 20 years old, this was Walt’s first foray into a business own his own and probably started him down that entrepreneurial path. A rocky start for this business forced him to leave temporarily to earn money elsewhere. He landed at the Kansas City Film Ad Company later just called Film Ad, where Ub joined him a short time later; being unable to maintain the business he and Walt had started. Doing commercial based on cutout animation there, Walt developed an interest in animation and was able to borrow some equipment from work to do experimental animation at home. After experimenting at home and reading E. G. Lutz’s book on Animated Cartoons, Walt found cel animations much more interesting and decided on that avenue as a career path. After awhile of working during the day at Film Ad and working at night doing experimental animations with the borrowed equipment, Walt decided once again to try his hand at starting a business, this time an animation studio. With the help of Fred Harman, his first employee in his new endeavor, Walt was able to secure a deal with local theater owner Frank L. Newman to screen their cartoons at his theaters. Laugh-O-Grams was born, and the cartoons were screened as “Newman’s Laugh-O-Grams” becoming quite popular in the Kansas City area. This success of “Newman’s Laugh-O-Grams” landed a Walt a contract to produced 6 cartoon for Pictorial Club’s, Inc. for $11,000. Unfortunately, this company went bankrupt never paying more than the $100 advance. Mired in debt from the added personnel cost to fulfill the new contract, Laugh-O-Grams Studio was forced into bankruptcy. I think it is important to point out here that there are those who claim Laugh-O-Grams failed because Walt was a poor money manager. However, through all the research I’ve done, Laugh-O-Grams failed because Walt’s portfolio of business was insufficient to absorb the losses due the failure or Pictorial Club, Inc. and the personnel added to meet their contract. I think it is an unfair characterization of Walt Disney’s money management skills, and cheap attempt at some to sensationalize their own work. At the time of Laugh-O-Grams failure in 1923, Walt Disney was a mere 22 years old, lack the experienced in the efforts and planning required to run a successful business. If anything he had an abundance of youthful exhuberance, not an uncommon trait at 22.

Meanwhile, brother Roy having been diagnosed with tuberculosis from his service in the Navy, having spent time being treated in Santa Fe, New Mexico and Tucson, Arizona, was recuperating in a Veterans’ Hospital in west Los Angeles after suffering an relapse after moving to Glendale. This is important because after the failure of Laugh-O-Grams, Walt sold off his few remain assets, bought a train ticket, and head west to Hollywood, setting us up for our next excursion. The start of what is now known as the Walt Disney Company.

Your comments or questions are always welcome. If you have a correction or something you think I should look at in my research, please feel free to contact me at

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