AN OFFICIAL EXPLANATION
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The rumor of the hanging/suicide has been
circulated probably since 1939 when the picture was
first released!
The explanation that I have found most often
given and most believable
is the following:
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MGM proclaimed at the time of filming,
that they had rented 300 birds
from ZOO PARK, in Los Angeles,
so that the director could select an appropriate
few for the background atmosphere amidst
the trees.
Among the birds were:
golden pheasants, a South American toucan,
an African crane and
a Saurus crane.
A few of these birds managed to escape and
appeared in various shots throughout the filming of
THE WIZARD OF OZ.
One of these incidents occurred on the set of
the Tin Woodsman (with the cottage),
that is so highly discussed even today - and is known as
THE HANGING/SUICIDE !!
The explanation given is that it was one of the
larger birds on that particular set that creates the
illusion of a person hanging!
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In the words of Mr. Ripley,
Believe it or not!
taken from http://www.westol.com/~wizardoz/hanging.htm