The fact that it was well-established long before OP's 1930s movies is attested by this sentence in the Transactions of the Annual Meeting from the South Carolina Bar Association, 1886 And to-day, “free white and twenty-one,” that slang phrase, is no longer broad enough to include the voters in this country.
8 "Free" and "on the house" both mean that you don't have to pay, but the inferred meaning is slightly different. If something is "free" it is without charge. For example, you might receive a voucher through the mail that says you are entitled to a free drink if you hand the voucher in at a bar.