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The story takes place in the 1930s. Not much was known about psychiatry or psychology in those days. California was a much smaller state, population-wise. The total population was around two-and-a-half million. It did not have a lot of facilities for caring for people like Lennie. He is mentally retarded. There is nothing a psychiatrist could do to improve his intelligence. California had one institution where people like Lennie ended up. That is where Lennie would have gone long before if George hadn't taken him under his wing. The institution was the California State Mental Hospital in Napa, founded in 1875. It was full of non-violent mentally challenged men like Lennie. They were given jobs to do around the premises, and the state even rented them out as agricultural workers. If George had tried looking for help for Lennie, his friend might easily have been taken away from him and placed in the Napa State Hospital. George has no legal rights to care for Lennie or to make decisions for him. Lennie might have been better off if George had managed to get him committed to Napa, or if he had persuaded Lennie to commit himself. Lennie would have still been alive, and he might have been relatively happy in such an institution. It was not the kind of hell-hole that Crooks describes in one scene where he says:
"Want me ta tell ya what'll happen? They'll take ya to the booby hatch. They'll tie ya up with a collar, like a dog."
Homicidal maniacs may have been restrained with straitjackets and padded cells, but the majority of the inmates at Napa had plenty of freedom, comfortable beds, clean uniforms, and decent food. It was just an institution, but it was clean and well maintained. None of the mentally retarded inmates were ever cured because there was no way to cure them. They were just permanently institutionalized.
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