The literal use of this phrase started appearing during the 1500's and then in the 1800's, read about it here.
The figurative use appeared in print in February 1934 regarding to proposed sale of the Brooklyn Dodgers. "Before going further In this direction, perhaps I can believe that awful suspense by stating that I am reliably informed today that the Brooklyn Dodgers, otherwise the daffiness boys, otherwise the young men who play by ear, are for sale." (source)
It basically means going with the flow, handling a situation on a whim, taking a wait and see attitude.
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