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The working title of this film was In Old Coney Island. The words of the opening title cards, "Twentieth Century-Fox presents Betty Grable, George Montgomery Cesar Romero in Coney Island," are sung by an offscreen chorus. During the film's finale, "There's Danger in a Dance," instrumental snippets of "Oh Susanna" and "Let Me Call You Sweetheart" are heard.
Several contemporary news items reported that the film was to be based on books by journalist Edward Van Every, and a screenplay written by Van Every and his collaborator, Dwight Taylor. Information in the Twentieth Century-Fox Records of the Legal Department and the Produced Scripts Collection, located at the UCLA Arts-Special Collections Library, however, reveals that Van Every and Taylor's materials were actually used for another 1943 Betty Grable picture, Sweet Rosie O'Grady. The studio had difficulties obtaining clearances from the heirs of Richard Fox, the publisher of the Police Gazette and the subject of Van Every's works, and in order to prevent another studio from becoming interested in the subject, sent out misleading press releases stating that Van Every was working on Coney Island.
The scripts collection also contains drafts for Coney Island written by Nat Ferber, John Wexley and Sam Hellman, but the extent of their contribution to the completed film has not been determined. According to a May 22, 1941 Hollywood Reporter news item, writer George Seaton, who is credited onscreen with the film's screenplay, was going to New York to gather research materials and interview the surviving family members of George C. Tilyou, who built Steeplechase Park at Coney Island in 1897. The news item states that "the entire picture is to be played from the standpoint of the Tilyous." Hollywood Reporter news items from 1941 announced that Laird Cregar, Alice Faye and Pat O'Brien would star in the film. In April 1942, a Hollywood Reporter news item noted that Irving Cummings had been set to direct the picture, with star Ann Rutherford. Lynn Bari was set for the "second" female lead, according to a September 1942 Hollywood Reporter news item. Although an October 1942 Hollywood Reporter news item stated that "Old Demon Rum," a song by Leo Robin and Ralph Rainger, would be sung in the picture, it does not appear in the final film. November 1942 Hollywood Reporter news items noted that second unit director Otto Brower directed some sequences at the Venice Pier, near Los Angeles.
Although the picture received mostly positive reviews, several critics complained about its lack of historical accuracy, including the Variety critic, who stated: "[Grable] winds up at the finish as star of a Willie Hammerstein-produced musical at the Victoria on Broadway. Fact that Willie Hammerstein didn't produce musicals, and that the Victoria was strictly a straight vaudeville theatre, evidently escaped this film's scenarist." Coney Island received an Academy Award nomination for Best Scoring of a Musical Picture. Lux Radio Theatre broadcast two presentations of the story. The first, on April 17, 1944, starred Dorothy Lamour and Alan Ladd, and the second, which starred Grable and Victor Mature, aired on September 30, 1946. In 1950, Grable and Mature starred in Twentieth Century-Fox's remake of the picture, Wabash Avenue (see below).