The Origins of Wonder
Using a key card that is some cards away from the target card is an old generalization of the basic key card usage in which the key card is right next to the selection. See, for example, the “Third Method” of “Simple Modes of Discovering a given Card” in Professor Hoffmann's Modern Magic, 1876, p. 44.
A special case in which the key begins at the mid-point of the deck can be called:
According to the printed record, this seems to have been originated by Oscar Weigle, who published his “Automatic Location” in Genii, Vol. 2 No. 11, July 1938, p. 390. Weigle cites Larsen and Wright's “Adding the Pips” from Genii, Vol. 2 No. 7, Mar. 1938, p. 235, as his inspiration. The principle is there, but Weigle's approach greatly improves on it, applying it to a double card-location, while Larsen and Wright use it to divine the number of cards contained in each of the other two packets.
An earlier example of the principle in gestation is Charles Jordan's “The Nifty Key” in his Four Full Hands, 1922, p. 15. (It also appears in Jean Hugard's Encyclopedia of Card Tricks, 1937, p. 91.)
The best known application of the sunken key is “The Twenty-sixth Location” in Expert Card Technique, 1940, p. 397. David Ben has evidence that this piece, while uncredited, is Dai Vernon's (see Genii, Vol. 69 No. 8, Aug. 2006, p. 73). Notes are penciled by Sid Lorraine and Tom Bowyer into a copy of More Card Manipulations 4, 1941, p. 29, “The Triple Location”, by Charles Miller and Jack McMillen: “Somewhat familiar something like the trick Ross sent?” [He is referring to a letter written by Faucett Ross.] “Yes based on Vernon's 26th card location as mentioned. (The guy gets no credit again.)”