March 26, 2014 posted by Jim Korkis

DUCKS AND TAXES: The Story of “The New Spirit”

new-spirit-posterIt has been said that the only two things that are certain in life are death and taxes. So, this month, as some of us struggle with taxes, we can blame Donald Duck.

In December, 1941, Henry Morganthau who was then Secretary of the Treasury came up with a brilliant idea to encourage Americans to pay their taxes to help the war effort. Walt Disney was asked to fly to Washington, D.C. to discuss a special project which Walt assumed had to do with the promotion of War Bonds.

Walt was confused when he found out the request was to get people excited about paying their taxes because he just assumed that everyone just paid their taxes on time as part of their responsibility as an American citizen.

He headed back to California with a six week deadline to make an animated cartoon and get it into the theaters by February of 1942. Production on other projects at the Disney Studio was stopped while a full time work force labored around the clock on the new film. The film was called The New Spirit and written by Joe Grant and Dick Huemer. When the preliminary storyboards were completed, Walt headed back to Washington to preview them for Mr. Morganthau and his staff.

The story started with Donald Duck, a patriotic little fellow who was very reluctant to pay his income tax. Listening to a radio broadcast about taxes, Donald progressively realized that paying the income tax would help win the war. With a whole new attitude, Donald quickly goes to work filling out his income tax return. Donald becomes so enthusiastic about paying his income tax that he races from California to Washington to submit his tax return in person.

This trade ad via Steven Thompson(click to enlarge)

This trade ad via Steven Thompson
(click to enlarge)

When Walt had finished his presentation, there was a brief silence and Morganthau’s secretary spoke out that she hated Donald Duck. An aide stated that he expected that the Disney Studio would have created a brand new animated character called “Mr. Average Taxpayer.”

Insulted and very angry, Walt defended his project and argued that using Donald Duck in the cartoon was like MGM loaning the talents of Clark Gable or some other big star. Donald Duck was Disney’s biggest and most popular star at the time.

In addition, his brother, Roy Disney, in a memo to Walt had pointed out that since the short was being given to theaters free, the theaters who already had booked in Disney shorts would cancel and replace it with the free short.

This warning proved true and the Disney Company eventually lost over $40,000 in bookings when theaters cancelled their commitments to a new Disney cartoon which was a harsh blow since the Disney Studio started the fiscal year over a million dollars in debt.

Mr. Morganthau eventually but very reluctantly approved the short because there wasn’t enough time to prepare another cartoon. Since income tax payments were due March 15 (back in those days), the Disney Studio had to rush to put together the short in time for a February release.

victory-bond-donaldFor the purposes of the cartoon, tax experts determined that Donald Duck was “unmarried but maintains a home in which he supports three adopted nephews under 16 years of age for whose maintenance he has a legal and moral obligation.” Donald listed his profession as “actor” with an income of “$2501.00” but as the head of the family he was entitled to certain exemptions and dependent credits, so his taxes came to only “$13.00”!

Walt ordered a full scale publicity campaign to coincide with saturation bookings at theaters. The New Spirit was an instant success and Walt had agreed to make it “without profit” as he had for all the war related work the Disney Studios did. However, due to some errors in handling administration procedures, the United States Treasury never properly paid Walt the $80,000 in costs for production and prints so not only did Disney Studio not make a profit, it experienced a substantial loss.

In fact, when the news was revealed to the public about Walt asking for money for the cartoon, some irritated citizens who misunderstood what was going on started a “Not a Dime for Disney” campaign.

The Treasury Department estimated that sixty million Americans saw the cartoon, and a Gallup Poll indicated that an amazing thirty-seven percent of the people who saw the cartoon said that it had directly effected their willingness to pay their taxes. The New Spirit was even nominated for an Academy Award in documentary short subjects! (Donald Duck in Der Fuehrer’s Face won an Oscar that year.)


The following year, the Treasury Department again approached Walt to make another short cartoon to encourage Americans to pay their taxes. Walt could re-use the majority of the animation from the previous short (since it had been a year since audiences had seen it) and in this way, Walt would be compensated for most of the animation he had previously produced.

Entitled The Spirit of ‘43, the short tells the framing story of Donald torn between a thrifty patriotic duck (who resembles an early Scrooge McDuck) and a spendthrift, zoot-suited duck who doesn’t have Donald’s best interests at heart. They are battling over what Donald should do with his paycheck. Donald eventually wallops the free spender and runs off to surrender his money to the Internal Revenue Service. Just as we do today. Sigh.


  • These two shorts are awesome. It’s a shame that some people accused Walt of being a war-profiteer when he was just trying to help our country win the war.

    • Yeah it is a shame when they have to bring that up. Without films like these, we might not have won the war at all if that’s a statement to be made.

      I personally enjoy “The New Spirit” more than I do “The Spirit of ’43”. Spirit of ’43 of course is a retread of the same message told another way with the repeated second half we’ve seen before (though I can see how at the time people may not have either seen the first film or forgotten that part of the film by the time the second showed up (the age before home video certainly made these things moot). Spirit of ’43 of course became Public Domain fodder in the video age when any company picked that one cartoon to highlight it’s VHS release with “DONALD DUCK” blazing it’s cover, hoping no child was going to see through this piece of wartime propaganda for what it was, and no doubt in the electronic babysitter realm such unusual relics did slipped through the cracks and onto our cathode-ray sets anyway.

    • Then there’s “Victory Through Air Power”, not a public service film per se but Disney’s own advocacy of what he believed was the means to winning the war. Don’t think there was any taxpayer money in that one.

  • What I find interesting is the fact that the RKO Pictures, name is signed in the trade aid. So I do wonder if RKO was the actual distributor of the both spirit shorts considering that they had the exact same title sequence design as regular Donald Duck shorts would minus the RKO name.

  • Here’s trade aid for spirit 1943

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