According to Jean Hugard, Australian magician Ernest Hoskings came up this the idea of shaving the ends of a string to points and waxing them, so that a spectator could cut the string in the center, the two pieces could be clearly separated, and then the waxed ends joined to effect a restoration. The trick later became known as Harry Kellar's, who seems to have invented it independently. Karl Germaine fooled Kellar with his own trick by knotting a short piece of string around the center of the long piece and joining the latter's waxed ends to imitate a tied loop. The waxed ends, believed to be the center of the string, were cut away. Then the false knot was snipped off, leaving the string restored. (See Hugard's personal files and Greater Magic, 1938, p. 785.)
The idea of unraveling the center strands to form two pseudo-ends is stated to be “new” in a trick by Joe Berg, “Japanese Paper String Restoration”, which is included in Abbott's Encyclopedia of Rope Tricks, by Stewart James, 1941, p. 94. In The Berg Book by Berg, David Alexander and Eric Lewis, 1983, p. 93, Lewis describes the method and mentions that Berg came up with the trick during the time he ran the Princess Magic Shop (1925-1933). Berg also marketed the trick in mid-1934, and perhaps earlier; see his ad is The Sphinx, Vol. 33 No. 4, July 1934, p. 131, in which the trick is touted as “The Famous Keller String Trick Outdone”. The method is essentially the same as Germaine's, with the unraveled ends replacing the short piece of string.
In the January 1945 issue of Hugard's Magic Monthly, Vol. 2 No. 8, p. 95, the principle was applied to the effect of displaying four apparent lengths of string, and then kneading two of them magically together. There Hugard stated the originator was unknown. He may have been referring to the specific application, rather than to the principle. On reading this trick, Joseph L. Barnett immediately reinvented the Germaine-Berg method, adding a ring to cause the ends to meld magically together. He published this under the title “St[r]ung!” in The Phoenix, No. 79, Mar. 2, 1945, p. 322. It was almost immediately, if not simultaneously, republished under his name in Thompson's My Best, 1945, p. 154, and later in Elliott's Magic as a Hobby, 1958, p. 22.