Source footage was projected onto a clear acetate cel, where the matte painter would then create the matte. Black areas of the cel would be opaque and the clear areas were transparent.

The resulting matte was then registered, backlit and photographed to high contrast negative film typically using an animation stand.

 A counter matte was then produced by contact printing the matte role onto a high contrast negative film.
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 The matte roll was then bi-packed with the background footage in an optical printer, and printed onto the master film stock. After this pass, the camera is wound back to the start frame.

 And the counter matte roll is bi-packed with the foreground footage in the optical printer. The areas that aren't masked off are printed to the master stock.

 The resulting film was processed and the composite scrutinized for effectiveness.