Green’s Dictionary of Slang

squasho n.

[‘the negro’s love of melons, pumpkins, squashes etc’ (Ware) but more likely quashie n.]

(US) a derog. term for a black person.

[UK]J. Ware Passing Eng. of the Victorian Era.
[US]Mencken ‘Designations for Colored Folk’ in AS XIX:3 174: The DAE does not list such vulgar synonyms for Negro as [...] squasho.
[US]Wentworth & Flexner DAS.