Here's my guess:

"Cholly" is a old, hardly used any more nickname for "Charlie".
"Mr. Charlie" was a rather commonly used African American nickname for "the White man". [for the 1940s or so].

"The White man" could be shorthand for 'the system'. "The "system" could be shorthand for being without money-and bums are often without money.

Hence, "being on the cholly" may have meant being on welfare or worse {being without any money to speak of}.

The entry for "Cholly" in Clarence Major's 1994 dictionary of African American slang "Juba To Jive" lends a bit of support to some of my guess work:


"Cholly" n - a dollar bill. May be associated with "Charlie" {for white man} who was associated with power {money}."

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One example of "Cholly" as a nickname, there's Cholly Atkins, African American jazz dancer & choreographer. And Cholly was the name of a central character in African American Toni Morrison's novel "The Bluest Eye".

Of course, I might be completely off base with this guess. But then, again, I might be right on the money.