Master of the Mise-en-Scène
Thank Shmoop for introducing you to this fancy French term that literally means "placing on stage." It refers to the director's arrangement of people, objects, space, and lighting to convey the meaning and emotion of a shot. Frank Capra was a master of scene composition; everything was there for a reason. Film Spectrum has got an in-depth look at how Capra did it, so we'll borrow a few examples from them to show what we mean.
First, take a look at the beautifully composed scene where young George and Mr. Gower are in the drugstore. We're looking at them through shelves of medicine bottles. Gower is turned away from the bottles, sadly staring at a photo of his son, who just died from influenza. George is worriedly looking toward the bottle of medicine Gower has just prepared, noticing his mistake with the prescription. There's a ton of information just in that shot.
Even the wallpaper speaks. Mary papers the house in a pretty traditional 1940s pattern of people and flowers. But, on that dark night, a troubled George goes up the stairs to see Zuzu, and there's something different. The wallpaper now has a pattern of nautical anchors. George always loved the sound of anchors being lifted because they signaled the beginning of an exciting journey. What do those anchors mean now? That he never got away? That his home is weighing down on him? It could be many things, but it's not a coincidence that this pattern is there.
Capra also uses signs everywhere in the film to augment a scene's meaning. Contrast the homey Bedford Falls sign (with another sign behind it—welcoming Harry home from the war) to the garish neon sign of Pottersville. Behind the Pottersville sign are more signs: no dogs allowed; no parking. No dogs? What an oppressive place to live.
Are You Afraid of the Dark?
The lighting Capra uses during the alternate-universe scenes is dark and shadowy, with chiaroscuro (sharp light/dark contrast) effects that give the scene a terrifying, otherworldly feel. George's abandoned house is all shadows; the police chasing him are silhouetted and backlit; Pottersville is alternately dark and lit up with glaring neon signs.
Thank goodness for that happy ending, with the brightly lit, cozy house and a Christmas tree glittering in the background. We were gonna have nightmares.
Modern audiences aren't impressed with freeze-frames, but Capra used them in this film before any other filmmakers. (Source) He freezes the frame when Joseph wants to make a point to Clarence, then unfreezes it and goes right on with the story.
Ready for His Close-Up
Here's a great example of the care that Capra took with each frame. There's a pivotal scene where George, totally overcome with despair, sits at the bar and prays to God to save him. By this time, Jimmy Stewart, a man of faith, was a basket case; he broke down and began to cry.
But, Capra hadn't expected it, and he had set the camera across the room from Stewart. He was so impressed with Stewart's emotion that he asked him to do it again so he could film it again in close-up. Stewart said no dice, that was the real deal and he couldn't fake it again. So, Capra took the film back to the lab and cropped and enlarged it, and cropped and enlarged it, until he got the "close-up." If you look at the scene closely, you'll see it's grainier than the rest of the scenes. That's because of the enlargement. As usual, Capra got what he wanted.