Same As How Our Grandmothers, Great-Grandmothers
Along with everyone else did for ages before packaged soap powders and or flakes.
Take a laundry soap bar and grate, flake or otherwise get it into smaller bits, add to a proper ratio of clean water (you need a the right amount of water to dissolve the soap but not enough to make a soap "liquid") and a clean pot or other vessel to hold the glop.
Here there are two main ways: put the soap into water stir, cover then place the pot/vessel in a warm spot for several hours to gently heat and dissolve the soap. Stir before each use.
Or, boil the water first in a kettle, then place the soap bits in a large vessel and slowly pour in the boiling water whilst stirring the mixture. Allow to sit until soap is dissolved.
When all is said and done you have a gloppy, slightly snotty looking mess that is soap jelly, ready to go to work in the laundry or other general house cleaning purposes.
The theory behind all this palaver was that the pre-dissolved soap mixture mixed instantly with water on wash day saving time. It also allowed better measuring than simply placing a bar of soap in wash waiting for it do melt down.
Before the advent of packaged soap powders and flakes soap jelly would have been used for washing dishes to one's hair.
My vintage laundry manuals give all sorts of recipes for soap jelly. Some have borax and or washing soda added, others a bit of petrol (forerunner of Naphtha soaps one supposes), and so forth.
Oh, the "warm spot" would have been back when homes had coal or wood fired ranges similar to AGAs today. Those ranges are never totally "off" so there are spots you can leave something to simmer without worrying about it boiling over. Housewives or laundresses would make up their soap jelly the night before wash day so it could sit and melt over night.