Pre-Crisis Jonathan Crane grew up a solitary child in the late 1920's, wiry and full of mischief. Even as a boy, Crane exhibited the characteristics that would determine the course of his life: cruelty and an obsession with fear.
As he grew older, Crane developed a bookish personality and an interest in psychology. His pursuit of this interest eventually landed him in a teaching position at Gotham University in 1941. While this position afforded him opportunities undreamed of in his youth, he found himself ostracized by his colleagues. While Crane spent every dime he made on books and scholarly pursuits, he ignored the trappings expected of his rank in society. His colleagues ridiculed him privately for his clothes, his mannerisms and his reclusive lifestyle. Stung by their censure, Crane determined that to have both books and affluence, he needed far more money than his university income would allow. To meet his aims, Crane turned to crime. His modus operandi was based on his own obsessions with the psychology and an insulting description used by his colleagues: Jonathan Crane became The Scarecrow.
Post-Crisis Jonathan Crane was a strange boy. He delighted in frightening the birds that he saw around his neighborhood, and he preferred the company of books to his peers. He was an odd looking boy, tall and frighteningly thin, and was the constant butt of the jokes of the more popular kids in school. He was teased about his appearance, with jibes made at his similarity in name and appearance to Ichabod Crane, the protagonist of Washington Irvings The Legend of Sleepy Hollow.
Crane grew up to study psychology and chemistry and eventually received his Ph.D. in these fields. He became a teacher at Gotham University and wrote numerous papers on his preferred subject within his field: fear. He performed many questionable experiments, and was finally dismissed from the University for pulling a gun in class to gauge the fear reaction of the class. Crane was driven mad by this final rejection and he began combining his two passions, fear and chemistry, into a plot for vengeance. Devising a chemical that created a fear reaction in those that were exposed to it, he began killing the regents of the University that had dismissed him, as well as members of the high school football team that had harassed him in his youth.
Revealed as Arkham inmates in Detective Comics #503, during Batman: The Last Arkham story arc, in Arkham Asylum: Tales of Madness, in Batman Annual #19, in Batman: Arkham Asylum, etc.