In Dale Carriage's 1936 book How to Win Friends and Influence People he claims that "There are more patients suffering from mental diseases in the hospitals in the United States than from all other diseases combined. If you are over fifteen years of age and residing in New York State, the chances are one out of twenty that you will be confined to an asylum for seven years of your life." There is no citation in the book where he got this statistic. Mental illness today is more socially acceptable than in the 1930s, but are these rates seem almost modern. Is this statement at all accurate for the time period? Were the amount of people confided to asylums that high? And what were the common diagnosis to put people to asylums at that time?
I don't have statistics in front of me, but it varied a lot state by state. California had one of the largest rates (if not the largest rate) of asylum use in the early 20th century. It was debated then, and still somewhat debated now, why that would be. At the time they attributed it to being in the West and that making people crazy. They also suggested that when people had issues in the East or Midwest they were sent to California (and a lot of effort was made to "deport" people back to their home states). More modern analysis suggests that part of it is because the infrastructure for mental health was overall better and more "progressive" for the time, and that what landed people in asylums was more often than not class-based and sometimes gender-based. The short answer is, it is a very complicated issue. Asylums were also used for things they wouldn't be used for today, like alcoholism and mental retardation and dyslexia (which was lumped in as a form of "feeblemindness"). For women, the public asylum was the place you ended up if life sort of just got too difficult and you didn't have anyone else to fall back on, like family. A lot of single mothers ended up in asylums.
My recollection is that New York State had similar sorts of things going on and also high statistics.
On California, there is a book that I found useful back when I used to research this sort of thing: Richard Fox, So Far Disordered in Mind: Insanity in California, 1870-1930 (1979). It is pretty outdated in terms of modern historical study of mental health issues, but I found it useful at the time. Sorry I can't be of more help; it is has been many years since I worked on this topic intently.