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The systematic training of dogs leading the blind began after the First World War in Germany but history of service dogs goes back two thousand years:

The story of dogs being used as service animals begins in Pompeii in 79 AD. Excavations have revealed a wall-painting of a dog leading a blind man. Over the course of history there are records from Asia and Europe of dogs leading blind men.
The systematic training of dogs leading the blind began after the First World War in Germany. Many men were returning from the front line blinded by poison gas. A German doctor, Dr. Gerhard Stalling, got the idea of training dogs quite by coincidence. He and his dog were walking with a blind patient on the hospital grounds when Dr. Stalling was called away on an emergency. He left the patient with his dog and upon his return, he could see that the dog was looking after the blind patient.
Dr. Stalling began working to determine ways to train dogs as reliable guides and opened the worlds first guide dog school in 1916. The school grew and new branches opened across Germany, training 600 dogs a year primarily for servicemen, and later for civilians.
Over the next ten years, thousands of guide dogs were trained and working as service dogs, but the quality of the dogs had declined and the business venture failed. Luckily, another guide dog training center had since opened in Potsdam, Germany in 1923, run by the German Shepherd Dog Association.
In 1927, Dorothy Harrison Eustis, an American dog trainer visited the training center in Potsdam and was so impressed with it, she wrote an article for an American newspaper describing the methods and success of the training center. After hearing about the article, an American blind man, Morris Frank, contacted Eustis and told her he would like to introduce guide dogs to the United States. Eustis took up the challenge, trained a dog (Buddy) for Frank. Shortly after, Eustis established two guide schools; one in Switzerland and another in Morristown, New Jersey. Realizing the need for properly trained instructors, she established a training school for instructors in Switzerland.