I have to wonder by how long this technique predates WWI, since history is littered with subversive cues and signals.
https://en.wikipedia.org/wiki/Intelligence_in_the_American_R...
Probably, any earlier than the 19th century and textiles were probably still pretty valuable, that they weren't just thrown around.
Also, perhaps most notably is the scytale which is pretty much the same concept, although probably minus the steganography.