Pancake make-up is a cosmetic used for heavy coverage and evening out skin tone. In cake form, the make-up is usually applied with a damp cosmetic sponge and dries to a smooth, matte finish. The wetness of the sponge regulates coverage as a damper sponge results in a lighter finish.
In the 1930s Max Factor created pancake make-up as an improvement on easily-smearing greasepaint used on stage. Actresses clamored for it as Factor rose to authority on make-up for film, personally making-up Gloria Swanson, Pola Negri, Greta Garbo, and Marlene Dietrich.
The cosmetic was recommended "particularly for women in the Forces or on other National work as it is very quick and easy to use...in six lovely shades from a pale tint to a deep warm tan, in keeping with the colouring of the Woman's Service Uniforms." Special shades were also made for the Ministry of Defence to darken the faces of commandoes for night excursions.
Sources:
http://www.amctv.com/behind/backlot/makeup.html
http://www.geocities.com/Athens/4177/beautyhist.html