Oswald the Lucky Rabbit was an earlier cartoon character created by the Disney studio for Charles Mintz, a film producer who distributed product through Universal Studios. In the spring of 1928, with the series going strong, Disney asked Mintz for an increase in the budget, but Mintz instead demanded that Walt take a 20 percent budget cut. As leverage, he reminded Disney that Universal owned the character, and revealed that he had already signed most of Disney's current employees to a new Mintz contract. Angrily, Disney refused the deal and completed the final Oswald cartoons he contractually owed Mintz.
Still in the spring of 1928, Disney asked Ub Iwerks to start creating new character ideas. A female cow and male horse were initially rejected. They would later turn up as Clarabelle Cow and Horace Horsecollar. Walt Disney got the inspiration for Mickey from a tame mouse, which from time to time appeared at his desk at Laugh-O-Gram Studio in Kansas City, Missouri. In 1925, Hugh Harman had drawn some sketches of mice around a photograph of Walt Disney. These sketches inspired Ub Iwerks to create a new mouse character for Disney in 1928, based on these sketches. "Mortimer Mouse" had been Disney's idea for the original name for the character before his wife, Lillian, convinced him to change it, and ultimately Mickey Mouse came to be.

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