It's Christmas Eve, and Bedford Falls is buzzing about Harry Bailey, who's coming home just as soon as the President gives him the Congressional Medal of Honor. At the bank, Uncle Billy gloats to Potter, who asks if George wouldn't rather be the one who traveled to far-off places and fought the Axis. (Potter understands everything about George except his basic decency. He certainly understands his tight finances, which is what he'll be testing today.)
Anyway, Uncle Billy gives Potter the paper so he can read about Harry, but fails to notice that he's folded up his bank deposit of $8,000 inside that paper. Potter watches from his corner office (he took over the bank on George's wedding day, remember) as Uncle Billy fumbles for the money at the teller's window, then races frantically about the lobby. If I were Potter, I'd be wondering why I didn't go after Uncle Billy sooner; he's always been the weak link in that partnership.
It's so weird how the very day Uncle Billy loses all their money is the day the bank examiner is auditing the Building and Loan. It's also the day Violet Bick comes in asking for a loan so she can move to New York and make her fortune. She apologizes to George because she has no collateral and few prospects, but he tells her the same thing he tells all his neighbors: he knows her, knows she's a good person, and he's sure she'll pay him back in her own time. She kisses his cheek, leaving a lipstick stain that the bank examiner stares at pointedly.
(I'm emphasizing this part, by the way, because I think it's going to be important to understand the options women have in Bedford Falls as opposed to ... other places.)
Uncle Billy bursts in, staring into corners and shuffling papers like he expects to find thousands of dollars in cash in them (but it is Uncle Billy, so you never know). George is like "Dude, will you just act like a normal person while the bank examiner is here?" and Billy freaks out and yanks George into his office. A few seconds later, they both come out with Billy Disease, the symptoms of which involve acting very distracted and staring anywhere one might have absently laid $8,000.
Potter watches as the men march up the street, eyes firmly on the ground. With every passing minute, he feels more and more confident that Billy won't remember the newspaper. (He was exercising a businessman's caution by being worried at all, because when has Uncle Billy remembered anything, ever?)
So, after a few hours of searching, George finally screams at Billy and storms off, and it's way less satisfying than you'd think, because while somebody really ought to come down hard on Uncle Billy, it shouldn't be George. George is too smart to rail futilely at sad old men, Potter only excepted.
Then George goes home, where Mary can tell that something's up but can't get it out of him, and then we get the Zuzu's Petals scene. (In case you don't remember, daughter Zuzu is ill because she was given a flower at school and kept her coat open so as not to crush it, which makes not a lick of sense, but then again Zuzu herself doesn't make much sense, seeing as how she acts like she's never seen a flower before today. When a few petals fall off the bloom, George pockets them.)
In the face of his sick, flower-obsessed daughter, George shows admirable self-control, (although she is far more annoying than Pete, who only wants to know how to spell things properly. If I ever become a parent, I vow to never get upset with my children for asking how to spell difficult words). He's gentle with her - saving his wrath until he gets downstairs, then unloading it on Zuzu's teacher (who calls to see how she's doing), the "drafty old house," and his three healthy children.
Mary knows George has a rough time of it at work, but she'll be damned if he's going to talk to their kids that way. Finally, he shambles off, and Mary calls up Uncle Billy to find out what the heck happened at work that day.
Meanwhile, George has gone to Potter for help. And while Potter could use this opportunity to own George's whole life, he instead decides to give his own speech (um, drink?) about how George ain't so big now, is he? And then he calls the cops on him. But the main point of this scene is that George has a life insurance policy for $15,000.
So George runs off and does the only thing he can think of to do: have a few stiff drinks. This would be a good plan, all things considered, except: you know how George cussed out Zuzu's teacher earlier? Well, her husband decided the best way to comfort her would be by going out to the bar. So he attacks George, but he only gets in one good punch before the bar owner, Martini, tosses him out. Martini is one of the earliest residents of Bailey Park and a big fan of George.
(One of the brilliant things about these scenes is that even as they show George imagining that he's losing everything, they emphasize what he still has. As the bank examiner is demanding the B&L's books, Violet is saying, "I'm glad I know you, George Bailey." As the angry drunk is punching George in the face, Martini is calling George "my best friend.")
But George doesn't notice what Capra's trying to point out, so he wanders off and drunkenly plows his car into a tree. And then some guy comes up and yells at him about THAT, and you know. that is just the LAST STRAW, mister.
And that's how George Bailey comes to be standing on a bridge at "10:45 p.m. Earth time," holding his $15,000 life insurance policy, staring into the churning water below, and thinking about what Potter said before: "You're worth more dead than alive, George."
And then, something else falls out of the sky and into the river.
(on to Part 8)