This is usually credited to Russ Walsh due to his marketed “Walsh's Appearing Cane,” 1947. However, it shows up in W. H.J. Shaw's Magic and Its Mysteries, 1893, p. 59, as “Entirely New Handkerchief to Snake.” Shaw writes, “[T]he whale bone strip that is usually employed is omitted, the apparatus consisting of a spiral spring made of [flat] steel wire…” The resulting stick is covered with cloth to give it the appearance of a snake, but it's virtually the same as the Appearing Cane including the initially displayed silk being drawn inside the cane in the action of its expansion.
See also Vanishing Cane in Newspaper.