It has been around 30 years that I have watched this film on Christmas Eve. It has become my own tradition.
The story is about two World War II U.S. Army buddies, one a Broadway entertainer, Bob Wallace (Crosby), the other a would-be entertainer, Phil Davis (Kaye). It begins on Christmas Eve, 1944, somewhere in Europe. In a forward area, Capt. Wallace is giving a show to the troops of the 151st Division with the help of Pvt. Davis ("White Christmas"). But the mood is somber: word has come down that their beloved commanding officer, Major General Thomas F. Waverly (Dean Jagger), is being relieved of command. He arrives for the end of the show and delivers an emotional farewell. The men give him a rousing send-off ("The Old Man"). An enemy artillery barrage ensues, and Davis saves Wallace's life by carrying him out of the way of a toppling wall, wounding his own arm slightly in the process. Using his "wounded" arm and telling Bob he doesn't expect any "special obligation", Phil convinces Bob to join forces as an entertainment duo when the war is over. Phil using his wound to get Bob to do what he wants becomes a running gag throughout the movie.
After the war, the pair make it big in nightclubs, radio and then on Broadway. They eventually become successful producers, mounting a hit musical, Playing Around, but Phil is increasingly concerned that his pal Bob has not met a woman he can settle down with. Several clumsy attempts to set him up with showgirls fail. In mid-December, after two years on Broadway, the show is in Florida. While at the Florida Theatre, they receive a letter from "Freckle-Faced Haynes, the dog-faced boy", a mess sergeant they knew in the war, asking them to audition his two sisters. When they go to the club to audition the act ("Sisters"), Phil notices that Bob is smitten with Betty (Rosemary Clooney), while Phil has eyes for her sister, Judy (Vera-Ellen). Following their number, the girls join Bob and Phil at their table. Believing he may have found the right girl for Bob, Phil brings Judy on to the dance floor so that Bob and Betty can get to know each other. Phil and Judy hit it off ("The Best Things Happen While You're Dancing"), and Judy tells Phil that she and her sister are headed for the Columbia Inn in Pine Tree, Vermont, where they are booked to perform over the holidays. Back at the table, Betty reveals to Bob that Judy, not her bother, sent them the letter. The two get into a brittle argument, and the prospects for a romance seem doubtful.
However, when Bob and Phil learn that Betty and Judy may be arrested (their shady landlord claims the sisters burned a $200 rug), Phil helps the girls escape and convinces Bob to don the girls' left-behind costumes and lip-sync "Sisters" from a record, to give the girls time to make it to the train. When Bob and Phil arrive on the train and reunite with Betty and Judy, Phil again uses "his arm" to convince Bob to travel with the girls to Vermont for the holidays ("Snow"). When they arrive in an unseasonably warm and snowless Pine Tree, they discover that the inn is run by their former commanding officer, Gen. Waverly, and it's in danger of failing because of the lack of snow and consequent lack of patrons. The general has invested all his savings and pension into the lodge.
Deciding to help out and bring business to the inn, Wallace and Davis bring Playing Around, with their entire Broadway cast, up to the Inn and add Betty and Judy where they can. At the same time, Bob and Betty's relationship starts to bloom ("Count My Blessings"). Meanwhile, Bob discovers the General's rejected attempt at rejoining the army, and decides to prove to the General that he isn't forgotten.
Bob calls Ed Harrison (Johnny Grant), an old army buddy, now the host of a successful variety show (intentionally similar to Ed Sullivan's). Bob tells Ed that he wants to make a pitch on Ed's show to all the men under the command of the General in the war, asking them to come to the inn on Christmas Eve. In response, Harrison suggests they go all out and put the show on television, playing up the "schmaltz" factor of the General's situation and generating lots of free advertising for Wallace and Davis. What Bob doesn't know is that nosy housekeeper Emma Allen (Mary Wickes) has been listening in to the phone conversation but has only heard Ed's suggestion, and hangs up before Bob rejects the idea. Mistakenly believing that her beloved boss will be presented as a pitiable figure on national television, Emma reveals what she heard to a shocked Betty.
The misunderstanding causes a disillusioned Betty to grow suddenly cold to a baffled Bob's advances. Unaware of the real reason for her sudden change of behavior, Judy becomes convinced that Betty, ever-protective of her little sister, will never take a relationship further until Judy is engaged or married. She pressures an extremely reluctant Phil to announce a phony engagement. The plan backfires when Betty abruptly departs for New York City, having received a job offer. Phil and Judy, distraught, reveal to Bob that the engagement announcement was phony, and Bob, still unaware of the real reason Betty is upset, heads to New York to explain about what Judy and Phil have done. Bob goes to see Betty's new act ("Love You Didn't Do Right By Me") and reveals the truth about the engagement, but is called away by Ed Harrison before he can find out what is really bothering her. Meanwhile, back at the Inn, Phil fakes an injury to distract Gen. Waverly, so he does not watch the Ed Harrison Show and see Bob's announcement.
On the Ed Harrison Show, Bob asks all the veterans of the 151st Division to come to Pine Tree, Vermont, on Christmas Eve ("What Can You Do With A General").
All is set right when Betty sees Bob's pitch and realizes she was mistaken. She returns to Pine Tree just in time for the show on Christmas Eve. Emma convinces Gen. Waverly that all of his suits were sent to the cleaners, and suggests he wear his old uniform to the opening of the show. Initially reluctant, he agrees. When the General enters the lodge where the show is to take place, he is greeted by his former division, who sing a rousing chorus of "The Old Man". Just as the song ends, he is notified that snow is falling.
In the finale, Bob and Betty declare their love, as do Phil and Judy. The background of the set is removed to show the snow falling in Pine Tree. Everyone raises a glass, toasting, "May your days be merry and bright; and may all your Christmases be white."
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