While Walt Disney Studios had a huge hit with its first full-length animated feature Snow White and Seven Dwarfs in 1937, subsequent movies such as Fantasia and Dumbo didn't do so well. Labor disputes plagued the company, and theaters in Europe were closed due to World War II. When the US entered the war in 1941, Disney was close to financial ruin. However, the US government saw the company as a resource. First, their studio lot in Burbank was commandeered as a new military base. That gave Disney Studios a lot of background characters for their new role as government propaganda producers. Disney produced training films for the military, educational films for schools, and patriotic cartoons to encourage citizens to buy war bonds and conserve resources. They also lent their characters to the military for everything from insignias to war bond certificates. By 1943, 90% of the studio's output was government funded.
Although Disney does not toot its own horn about their World War II work, due to the racist caricatures depicted in their films, a new exhibition at the Museum of Flight in Seattle called The Walt Disney Studios and World War II is open until February. It examines the wide range of work Disney did to promote the war effort both inside and outside the military. Read an overview of Disney's World War II work and the effects it had at Smithsonian. -via Damn Interesting