Why is there a squirrel on It's a Wonderful Life?

Answer 1

There is a seldom seen alternate edit to this movie which has Uncle Billy's pet squirrel stealing the $8000 from the desk top and using it for bedding for his nest in the tree outside. The money is never found.

In both edits, in the scene where George and Billy are at the house and George screams at Billy for losing the money and then leaves, Billy, the falls face down on the desk sobbing. At this point the squirrel comes in through the window and climbs on his arm. This seems kind of odd in the context of the most popular edit, but in the alternate edit, this squirrel is key to the storyline.

In this alternate version Potter and his manservant have no knowledge of where the missing money went. This alternate version still paints Potter as a money grubbing old man, but not as a common thief, with his manservant as witness. It would have been easy for this manservant to subsequently blackmail Potter.

Answer 2

It's the Loan company mascot (and Billy Bailey's pet).