Geoff Nunberg writes with this Google Ngram:
This shows the usage of gay (at least in the books Google samples) gently declining until roughly 1980 and then zooming up. The interpretation I’d provide here is that “old gay ‘merry’ ‘” was declining very slowly (it became “old-fashioned”), until “new gay ‘homosexual’ ” eventually took over massively. But others might have other interpretations.
