(Before we click our ruby slippers together, I would just like to state that the story of Walt Disney and "The Wizard of Oz" is an incredibly difficult one to untangle, and I would have been lost in my quest without this fully illustrated 2006 piece by noted Disney historian Jim Hill.)
As work on his first feature-length animated film, "Snow White and the Seven Dwarfs," chugged steadily along, Walt Disney was looking for a follow-up. He found it in the Baum's 'Oz' books, which, to Walt at least, captured the same spirit as 'Snow White,' and could serve as a similar crossover success – it was enriched with childlike fantasy but still appealed to adults. Unfortunately, Walt was told that the rights had been sold – first to Samuel Goldwyn (for a cool $60,000) and then, as heat started to increase around the 'Oz' property following the commercial success of Disney's "Snow White and the Seven Dwarfs," to Louis B. Mayer (in 1938). The debt to "Snow White and the Seven Dwarfs" can't be overstated – the original designs for the Wicked Witch of the West even shared an eerie similarity to the film's villainous queen.
In 1954, 11 of the 'Oz' novels (among them "The Emerald City of Oz," in which Dorothy's relatives from Kansas come to live in Oz, and "The Road to Oz," a story that featured a character named Polychrome The Rainbow's Daughter) were up for sale, and Walt snapped them up. The thinking was that the subsequent novels would be adapted for his "Disneyland" television series, and not the big screen. But the script for what would eventually be known as "The Rainbow Road to Oz" was soon transferred to the live-action feature development team, who assigned a pair of "Mickey Mouse Club" principles to produce and direct, with a number of the Mouseketeers scheduled to perform in the film. (The fourth season opener of the "Disneyland" show featured the "Mickey Mouse Club" performers trying to convince Walt to make the movie – if you watch the footage you can see possible costumes and even musical numbers that were said to be part of the movie – it's available on one of those limited edition Walt Disney Archives DVDs from a few years ago).
By 1958, though, Walt had both bought the rights to the 12th book (at an exorbitant fee) and completely abandoned "The Rainbow Road to Oz," instead focusing his attention on a similarly candy-colored adaptation of "Babes in Toyland" (this movie also featured Annette Funicello, who was slated to appear in "The Rainbow Road to Oz" as Oz queen Ozma) and on utilizing the 'Oz' property to augment a lame duck Disneyland attraction. While "Babes in Toyland" did end up happening, the 'Oz' ride expansion (which was a new finale for the sleepy Storybook Land Canal Boats attraction) never materialized.