Apple Macintosh System 7.5 - Manual (Page 91)

To set up the Documents folder, open the Apple (K) menu and choose
Control Panels. Then open the General Controls panel.
Finder hiding
You can hide the Finder whenever a program is open. Hiding the Finder
prevents you from accidentally leaving a program in which you are working
(and going to the Finder) by clicking outside the program window. Finder
items on your screen—such as the hard disk, Trash, and folders—are hidden
until you close the program.
To set the Finder-hiding option, open the Apple (K) menu and choose Control
Panels. Then open the General Controls panel.
83 What’s New
To create a Documents folder on your desktop
and use it as the default location for saving and
opening documents, click this button.
To hide the Finder
when it is in the
background, click
here to remove the X.
The picture on the
right shows what your
desktop looks like
based on your choice.