Origins of the Chinese Auction

Renita posed an interesting question today at work. Where did Chinese Auctions start and why do they call them Chinese Auctions. This of course came up when Dave asked her what special event a certain account ran. I of course googled the question and here's what I found:

As a youngster (mid-'40s to mid-'50s) growing up on Long Island, New York, US, the story about Chinese Auctions that was told was this:
In the early 1900's a wealthy American socialite (believed to reside in NY) was looking for a novel idea to use for one of her fund-raising events for a charity in which she was involved. She came up with several ideas, but quickly rejected them because they were not quite novel enough for the times. (At that time something novel and unique quickly became the rage and if you were the socialite that introduced it then your social standing was elevated.)
The socialite came up with the idea of a different type of auction to raise money for the charity. Various items would be displayed at the event and in front of each item would be a container (basket, bowl, jar--whatever). The guests would be invited to bid on the items by writing their names and the amount they wished to bid on a piece of paper and placing the paper in the container. It was all very discrete, private and unpublished--no one really knew who was bidding on what or what amount they were bidding.
At that time anything and everything to do with the Orient or Orientals (as those terms were then in use) was considered mysterious, intriguing, secretive, exotic and maybe even a little provocative. The socialite came up with the phrase Chinese Auction because she felt that this type of auction was mysterious, intriguing, secretive.
Assuming, arguendo, that this story is true, I would suspect that the socialite was being creative and perhaps a bit pretentious (a la Hyacinth Bucket--it's Bouquet!) in that she felt that if the phrase Chinese Auction was printed on the invitations then the curiousity of the recipients would be piqued to such a degree that they would quickly Rsvp in the affirmative thereby increasing the potential success of the fund-raising event.
For those familiar with the BBC program "Keeping Up Appearances," the socialite's thinking was not dissimilar to that of Hyacinth in the episode where she invites guests to a "Waterside Buffet with Riparian Entertainment" to lend an exotic flair to a "picnic by the river."
I cannot attest to the truth of this story, but if nothing else it is an interesting sidebar.