Mrs. Sixgun,
Paper cartridges originated about the time of breachloading rifles were developed, ie 1840's. There are some other uses of "paper cartridges" earlier than that, where the powder and bullet were wrapped together for quicker loading by those using muzzleloaders. By the time of the U.S. Civil War, such were the norm for military use. The two uses need to be distinguished. The muzzleloaders tore open a cartridge, poured the powder into the barrel, then shoved the bullet (sometimes with the paper; sometimes without) on top of the powder and finished with the ramrod. The cartridges were created by wrapping a piece of paper around a dowel and a bullet, and then filled with powder. The exact diameter was not a concern. It just fit inside a cartridge holder, or box.
The breachloader cartridge differed in a couple of respects. The first was that the outside diameter had to be less than the diameter of the chamber, so tolerances were a concern. Second, the paper had to be consumed when the cartridge was fired. That was solved by "nitrating" the paper, which produced "nitro-cellulous", an early form of smokeless powder. The cartridge was inserted into chamber, and in the case of the earliest successful breachloader, the Sharps, the beachblock rose, cutting the end of the paper and exposing the powder. The primer was then used to fire the cartridge. These were used in ever increasing numbers through the Civil War to the time in the late 1860's when brass cases were to replace the paper, creating a "seal" for the gases during firing.
There is a longer discussion in Cartridges of the World and several other publications.
Hope this helps.
dclark
