Types Of Children's Literature: A Collection Of The World's Best Literature For Children (For use in colleges, normal schools and library schools) Collected and edited by Walter Barnes, A.M. (1920)
Children’s Stories in American Literature, 1660-1860 By Henrietta Christian Wright. New York, Charles Scribner's Sons (1909).
The Children's Story Of The War. Vol IV. The Story of the Year 1915 By Sir Edward Parrott, M.A., Ll.D. (1916)
Children's Hour With Red Riding Hood And Other Stories Edited by Watty Piper (1922)
Other sites that include thousands of free titles in HTML and .pdf formats include openlibrary.org, fullbooks.com, and literature.org.
UPDATE 3/25/11: ok, so apparently there is a whole "children's bookshelf" on Gutenberg.