In 1870 Thanksgiving was still gaining its legs as a US national holiday, and people were looking for interesting ways to celebrate. America, at that time, had small and slowly dying tradition of celebrating Guy Fawkes Day (November 5th) and other bonfire nights, kept alive in part by starving immigrants coming in from Ireland. These traditions involved variations on children begging for goodies, wearing masks, and playing pranks. Enter Thanksgiving, which needed some fun.
The first Ragamuffin days were very much like modern Halloween, with children dressing up as tramps and vagabonds and going from door to door asking adults for sweet treats. As time went on the costumes diversified to include sailors, bandits, cowboys, movie stars, and animals -- and then later as cartoon characters. By the late 1930s it started to become common to hold a Ragamuffin Parade, in which children were discouraged from the shameful habit of begging -- perhaps in part in reaction to The Great Depression -- by being encouraged to participate in costumed parades instead. In 1956 the Thanksgiving Ragamuffin Parade was finally dealt a death blow by the popular Macy's Thanksgiving Day Parade, which has ruled Thanksgiving ever since.
Ragamuffin parades live on, however, in the New York area. They followed the national trend of moving back into October, and most Ragamuffin Day traditions have attached themselves to Halloween and the days preceding. The largest recorded Ragamuffin Day parade occurred in 1972, with 6,000 children and 35,000 spectators gathering in Bay Ridge, Brooklyn on October 15th of that year. While the parades live on, the day itself is dead, and now is known simply as turkey day.