See biography by P. Morrell (1934, repr. 1970).
Sturges' screenplay never lets the facts of Brady's life, lurid as they are, get in the way of the story he's telling, and the events of the film wind up having only a passing resemblance to Brady's actual biography. Edward Arnold went on to play Diamond Jim Brady again five years later, opposite Alice Faye in Lillian Russell.
While on a cross-continental sales trip, Brady rescues Mr. Fox (Eric Blore) from a crooked salesman, but in the process they are forced to jump from the train. Brady soon discovers that Mr. Fox is trying to sell something called an "undertruck" to be used at railroad stations, so he takes on the product himself. With success, Brady wants to marry his sweetheart, Emma Perry (Jean Arthur) but finds out that she is engaged already. Heartbroken, all of his energy goes into the Brady-Fox Company.
A grand success, Brady has ostentatious diamond jewelry designed for him, leading to his nickname, "Diamond Jim Brady". Brady spares no expense to indulge his every whim, lavishing money on wine, women, song and, especially, lots and lots of food. Brady sees singer Lillian Russell (Binnie Barnes) perform, introduces himself, and soon he is promoting her career and flirting with her. Russell is not available to him, however, since she is in love with business man Jerry Richardson (Cesar Romero). Brady soon meets Jane Matthews (Jean Arthur again), a lookalike for Emma, and is instantly smitten with her. They become engaged, but on the eve of their wedding, Brady gets drunk because of his suspicions about Jane's relationship with a banker named "Briggs" who is supposedly her "uncle", and the wedding is called off. Jane remains his friend, but refuses to give in to his occasional proposals – for one thing, she has fallen in love with Jerry, but neither want to tell Brady for fear of hurting his feelings.
When the stock market crashes, Brady loses his fortune, and starts again from scratch, promoting a steel railroad car for its supposed safety. He is injured during a public demonstration of the car, and spends a year recovering in the hospital, while at the same time rebuilding his fortune. When he gets out, he plans a trip to Europe for himself, Jane, Lillian and Jerry, during which he believe he will finally get Jane to marry him. Instead, Jane and Jerry confess their love, the news of which shatters Jim. On the rebound, he proposes to Lillian, but she rejects him as well. Despondent, he returns home and prepares to eat himself to death, but not before burning up all the I.O.U.'s in his possession.
Diamond Jim, which had a working title of Diamond Jim Brady, was based on the 1933 biography of Brady by Parker Morrell, to which Universal purchased the rights. However, prior to that, Paramount Pictures had bought the rights to a short story by Mike Simmons based on Brady's life, and had registered the title with the Hays Office. Paramound subsequently protested Universal's production, but how the matter was resolved is not known.
Brady died in 1917, but Edward Arnold had met him twice early in his acting career: once when Brady come to meet an actress who was performing in the show Arnold was in, and once when he came backstage to meet Ethel Barrymore, whose acting company Arnold was a part of.
Joseph I. Breen, head of the Hays Office, objected to the sexual innuendo in the relationship between "Jane" and "Briggs", who was supposedly her uncle, and wanted it changed as it volated the Code. In addition, Dorothy Russell, the daughter of Lillian Russell, objected that the screenplay misrepresented the relationship between Brady and Russel, which she characterized as not a life-long friendship, but a short term acquaintanceship that lasted only from 1902 to 1916. She also believed that the film used material from an article about her mother she had written which was published in a magazine. She engaged an attorney to file a lawsuit, but the outcome is unknown.
Diamond Jim was in production from 3 April to 20 May , at a cost of over $750,000. The filming of the train crash took place at a narrow-gauge railway near San Luis Obispo, California with vintage cars donated by the Pacific Coast Railway. Jack Foley, head of Universal's sound effects department, recorded the crash.
The film was released on 2 September 1935.