The Sock Monkey is listed by Time Magazine as number 8 in it's 100 Greatest Toys of all time.  

Home made toys for children had been popular since Victorian times, with the monkey and elephant the symbol of the exotic newly-colonised Africa.  In 1929 America Suffered a huge stock market crash and during the 1930's there was a worldwide economic depression, meaning home made-toys were often the only toys children could own.  

The Nelson Knitting Company created the first no-seam socks during the 19th century (in Rockford, Illinois). They were hugely popular with working families and soon copycat socks began to chip away at their business.  A red heel was added in 1932 to assure customers that they were buying the original. As needs must during the Great Depression, mothers soon made use of this red heel as the mouth for an easy to make homemade toy that could be produced from a worn out sock. It was not until the 1950s that the Nelson Knitting Company acquired any kind of patent for a sock monkey, despite the fact that they had been including a pattern with each pair of Red Heel Rockfords for years.
The sock monkey is now seen as an important part of American childhood and has appeared in numerous films and books over the years.