Children watching marionettes in New York, 1935 (From Wikimedia)
Alfred Eisenstaedt Children At A Puppet Theatre Paris Picture. It appears the French kids really get into this.
Children watching a puppet show in the street. Honshu Shizuoka Izu Peninsula, Japan
Photograph: George Dixon Aked, 1937
Children watch puppets and performers at the Polynesian Luau – Orlando, Florida
Photo: Philip Guataer, 1981
State Archives of Florida, Florida Memory
Modern puppeteer Nicola McEldowney entertains children with Just So Stories in Cambridge, MA, 7/20/12 — at Henry Bear’s Park.
Of course, marionettes are not only for kids. Although the puppet show in the Sound of Music was put on ostensibly by the children of the family, it was actually the famous Bill Baird and his troupe who created the puppets and the segment, for the enjoyment of the adults.
Puppets can be useful, too:
© Calvin Grondahl
The Old Wolf has spoken.
Playing in the World Game 
I am struck by the presence of two black kids in the 1935 American picture. Not that I was alive then, but wasn’t that in the middle of segregation? I don’t get it.
It was New York. While de jure segregation did not end in the USA until 1954, and despite continuing de facto segregation which ensured that residentially the vast majority of Manhattan blacks were confined to Harlem, New York was always an anomaly. National currents prevailed, but this was not the South with its hard-core segregationists.
Thank you for the explanation! There’s nothing like these primary sources (photographs) that you “cite” to confuse one’s ossified ideas, is there?
Thank goodness for You Tube. I can still watch Howdy Doody!
Absolutely. I’ve found some gems out there, and it’s wonderful not only for the entertainment but for the historical archival. I just wish that more had been preserved. In the days of live commercials and live television, much went over the airwaves that was lost forever, and even much that was taped or printed on celluloid will never be recovered.