The common phrase “basket case”, currently refers to a person who is helpless or incapable of functioning normally, especially due to overwhelming stress, anxiety etc.
It’s original meaning comes from the US military immediately following WWI. The term was never used to describe anyone – only in order to deny that any such servicemen existed. This bulletin was issued by the U.S. Command on Public Information in March 1919, on behalf of Major General M. W. Ireland, the U.S. Surgeon General:
“The Surgeon General of the Army … denies … that there is any foundation for the stories that have been circulated … of the existence of ‘basket cases’ in our hospitals.”
This bulletin was reported on in many U.S. newspapers at the time. Many of them also defined what was meant by ‘basket case’. The New York paper The Syracuse Herald, March 1919 read:
“By ‘basket case’ is meant a soldier who has lost both arms and legs and therefore must be carried in a basket.
Given that the term was originally reserved for incapacitated servicemen, there wasn’t much call for it until the next major war of English-speaking peoples – WWII. Again, it comes from the U.S. military and again in the form of a denial from the Surgeon General. In May 1944, in ‘Yank’, the then Surgeon General, Major General Norman T. Kirk, said:
“… there is nothing to rumors of so-called ‘basket cases’ – cases of men with both legs and both arms amputated.”