<P> The original story "The Greatest Gift" was written by Philip Van Doren Stern in November 1939 . After being unsuccessful in getting the story published, he decided to make it into a Christmas card, and mailed 200 copies to family and friends in December 1943 . The story came to the attention of RKO producer David Hempstead, who showed it to Cary Grant's Hollywood agent, and in April 1944, RKO Pictures bought the rights to the story for $10,000, hoping to turn the story into a vehicle for Grant . RKO created three unsatisfactory scripts before shelving the planned movie, and Grant went on to make another Christmas movie staple, The Bishop's Wife . </P> <P> At the suggestion of RKO studio chief Charles Koerner, Frank Capra read "The Greatest Gift" and immediately saw its potential . RKO, anxious to unload the project, in 1945 sold the rights to Capra's production company, Liberty Films, which had a nine - film distribution agreement with RKO, for $10,000, and threw in the three scripts for free . Capra, along with writers Frances Goodrich and Albert Hackett, with Jo Swerling, Michael Wilson, and Dorothy Parker brought in to "polish" the script, turned the story and what was worth using from the three scripts into a screenplay that Capra would rename It's a Wonderful Life . The script underwent many revisions throughout pre-production and during filming . Final screenplay credit went to Goodrich, Hackett and Capra, with "additional scenes" by Jo Swerling . </P> <P> Seneca Falls, New York claims that when Frank Capra visited their town in 1945, he was inspired to model Bedford Falls after it . The town has an annual "It's a Wonderful Life festival" in December . In mid-2009, The Hotel Clarence opened in Seneca Falls, named for George Bailey's guardian angel . On December 10, 2010, the "It's a Wonderful Life" Museum opened in Seneca Falls, with Karolyn Grimes, who played Zuzu in the movie, cutting the ribbon . </P> <P> Both James Stewart (from Indiana, Pennsylvania) and Donna Reed (from Denison, Iowa) came from small towns . Stewart's father ran a small hardware store where James worked for years . Reed demonstrated her rural roots by winning an impromptu bet with Lionel Barrymore when he challenged her to milk a cow on set . </P>

Where does it's a wonderful life take place