Laugh-O-Gram Studio

Iwerks-Disney Commercial Artists

Walt Disney went to Kansas City in October 1919, where he worked as an apprentice artist at the Pesmen-Rubin Commercial Art Studio, where he drew commercial illustrations for advertising, theater programs and catalogs, and befriended fellow artist Ub Iwerks. In January 1920, as Pesmen-Rubin's revenue declined after Christmas, Disney, aged 18, and Iwerks were laid off.

They started their own business, the short-lived Iwerks-Disney Commercial Artists. Failing to attract many customers, Disney and Iwerks agreed that Disney should leave temporarily to earn money at the Kansas City Film Ad Company, run by A. V. Cauger; the following month Iwerks, who was not able to run their business alone, also joined. The company produced commercials using the cutout animation technique. Disney became interested in animation, although he preferred drawn cartoons such as Mutt and Jeff and Max Fleischer's Out of the Inkwell. With the assistance of a borrowed book on animation and a camera, he began experimenting at home. He came to the conclusion that cel animation was more promising than the cutout method.

Laugh-O-Gram Studio

In 1921, Walt Disney was contracted by Milton Feld to animate twelve cartoons, which he called Newman's Laugh-O-Grams. On May 23, 1922, when Disney was 20 years old, Laugh-O-Gram Films (LOGF) was incorporated by him using the remaining assets of the defunct Iwerks-Disney Commercial Artists from local investors. LOGF produced nine of the requested 12 films with little income. Encouraged and inspired by his shorts' popularity at the theatre, Disney decided he wanted to make his own animated versions of fairy tales too, and invested six months on his first attempt at Little Red Riding Hood.

Disney's employees on the series included several pioneers of animation: Ub Iwerks, Hugh Harman, Rudolf Ising, and Carman Maxwell. The company had financial problems and by the end of 1922, Disney was living in the office and bathing weekly at Union Station.

During the studio's sales manager Leslie Mace's stay in New York, where he was looking for distributors, he ended up signing a contract for six animated shorts with Pictorial Clubs, Inc. of Tennessee on Sunday, September 16, 1922. Pictorial agreed to pay US$11,000 (equivalent to $211,581 in 2025) for the cartoons, which were supposed to be shown at schools and other non-theatrical places, but only paid $100 in advance. The rest of the payment would have to wait until January 1, 1924, when all the shorts had been delivered. When Pictorial went bankrupt only a few months later, the studio never received the rest of the payment, its financial problems became even more serious, and the staff ended up leaving. When the local Kansas City dentist Thomas B. McCrum, from the Deener Dental Institute, contacted Disney and offered him the job of producing a short subject about dental hygiene intended for the Missouri school system, he brought together some of his staff again and made Tommy Tucker's Tooth, which earned the studio $500. Instead of paying off his creditors, the money was invested in the live-action/animation demonstration film Alice's Wonderland, starring the youthful Virginia Davis. Disney had noted how popular the Out of the Inkwell series from the Fleischer Studios was, which had animated characters interacting with the real world. By reversing this gimmick and using a real-life character in a cartoon universe instead, he hoped for a hit. Virginia Davis's contract with Laugh-O-Gram was signed by her parents on April 23, 1923, with terms giving her 5% of the Alice's Wonderland film's receipts. Looking for a distributor for Alice's Wonderland on May 14, Disney wrote to Margaret J. Winkler, a New York film distributor. Disney wrote to Winkler's former employer, Warner Bros. Pictures founder Harry Warner, who recommended Winkler's services.

After finishing the raw edits of Alice's Wonderland, the studio filed for Chapter 11 bankruptcy in July 1923. Disney finally made some money by shooting a film of a 6-month-old girl named Kathalee Viley and selling his movie camera, earning enough for a one-way train ticket, moving to Hollywood, California; he brought along an unfinished reel of Alice's Wonderland.

The bankruptcy trustee was able to force LOGF's erstwhile distributor and debtor, Pictorial Films, Inc., to pay LOGF's agents the sum owed while agreeing that Pictorial could exercise its contractual distribution rights for LOGF works and to purchase several of LOGF's films: The Four Musicians of Bremen, Jack the Giant Killer, the Lafflets series, and Alice's Wonderland.

The studio building fell to ruin and efforts were made to restore it by a non-profit group called "Thank You, Walt Disney". The Disney family promised $450,000 in matching funds for the rights to other Disney memorabilia and to tell the history of Walt Disney's life in Kansas City, a movie house to exhibit original and restored Laugh-O-Grams, and an education center for animation workshops.