According to the great Google, Mt. Holyoke College, Mass. used the first letter grades in 1897. How far and fast the practice traveIed, I can't say. [Edit: Just saw Seeker's explanation after I posted]
Meanwhile, Richard, I'm going through your eschatology thread and we have considerable overlap in thinking. Quotes from various sources assume or insist on a real Hitler, though, but that only reinforces to me the absurdity that anyone would defer to such a character on anything. Assertions from one author and another and another recalling Hitler seizing this or controlling that has me feeling like Luke Skywalker fending off a fusillade of storm trooper fire with my light sword. I did hear something that made me think the scales may one day fall as Joesph P Farrell in a recent podcast talked about how much Karl Haushofer helped "Hitler" write Mein Kampf. Farrell I have always found entertaining which is why his Nazi aliens stuff never turns my stomach. I don't think he takes it all that seriously and that sets a good tone. The fact that someone with his profile is even mentioning Haushofer makes me hope that some of what's discussed in the circles I frequent may one day actually get some air time in wider media platforms.