Depression cake has been referred to as "War Cake" by texts dating back to World War I. In a pamphlet distributed by the United States Food Administration in 1918 entitled "War Economy in Food", War Cake is listed under "Recipes for Conservation Sweets". The United States Food Administration stressed the importance of reducing sugar consumption during the war and offered molasses, corn syrup, and raisins in its place.
When the Great Depression hit America following the Stock Market Crash of 1929, families were forced to stretch their budgets and "make do" with minimal and cheap ingredients when it came to cooking. Some women were able to feed their families on $5 per week. Dessert became a luxury for most, and depression cake was a more affordable alternative to other cakes that used milk, eggs, and butter. Affordability was achieved through ingredient substitution. For example, shortening was substituted for butter, water was substituted for milk, and baking powder was substituted for eggs. Depression cake is just one of many examples of ingredient substitution during the Great Depression, as some women took full advantage of the practice by making mock foods such as mock apple pie and mock fish.