Cotton-eyed Joe as a fiddle piece seems to have arisen in the mid-1800s. Verses, often floaters, were attached and called to the dancers. Where and when these verses originated is difficult to determine. There is much speculation about racial content in some of the verses- some of them do but most of them don't.
Many people seem unable to accept the song as a party and dance song used by both blacks and whites, but that is the case, since it occurs in the literature of both races (all verse references are 20th c, unless Guest Sam Clements find is proven). Which group, black or white, had it first? Impossible to tell without dated references.

In the earliest printed usage, cotton-eyed is defined as having the whites of the eyes prominent. This is a characteristic that appears occasionally in both whites and blacks (sometimes activated by thyroid disorder), and when it does, people remember it. Some verses imply that Cotton-eyed Joe was a vagabond; a trouble-maker, here today and gone tomorrow.

Guest Sam Clements, what is the exact reference to the story you quote? Title of story? Page numbers? Vol. and No.? It is an interesting find because of the date, which is earlier than any reference so far found. Not unlikely, however, since the fiddle tune's use in America seems to go back at least that far.