The noun mothball denotes a small pellet of a pungent substance (originally camphor, now typically naphthalene) placed among stored clothes, etc., to keep away moths.
The phrase in mothballs means: in a state or period of inactivity, disuse, reserve, storage or postponement.
Conversely, the phrase out of mothballs means: back into activity, into use.
These are, in chronological order, the earliest occurrences of the phrase in mothballs that I have found:
1-: From The Sun (New York City, New York) of Thursday 14th July 1892— “Senatorial dignity” is the grammatical subject of “has been carefully put away in moth balls and camphor”:
Washington, July 13.—Senatorial dignity, as far as dress is concerned, has been carefully put away in moth balls and camphor during the present warm weather, and dignified Senators to-day displayed themselves in costumes some of which were almost sensational in design and coloring.
2-: From the Saint Paul Daily Globe (Saint Paul, Minnesota) of Saturday 8th December 1894:
The galleries applauded Mr. Bryan, of Nebraska, yesterday. Mr. Bryan’s senatorial boom is packed away in moth balls, but he is keeping his presidential boom out pretty far into the winter.
3-: From Washington Letter, published in The Catoctin Clarion (Thurmont, Maryland) of Thursday 9th January 1896:
Washington, D. C., January 6th, 1896.
Those who expected a dispute between the United States and England over the Alaskan boundary would better pack these expectations in moth balls and pigeon-hole them. There isn’t the slightest probability of their ever being realized.
4-: From one of the unconnected paragraphs making up the column Told in Town, published in The Rockford Republic (Rockford, Illinois) of Friday 9th October 1896:
The baseball season has been packed in moth balls and put away until next spring.
5-: From The Morning Tribune (Tampa, Florida) of Sunday 23rd May 1897:
The advance agent would do well to pack up that wave of prosperity in moth balls this summer.
6-: From The Marble Hill Press (Marble Hill, Missouri) of Thursday 12th August 1897:
It is not at all strange that the United States senate should not take kindly to the idea of packing the currency question away in moth balls in the shape of a commission. The senate is quite fond of keeping this question on tap and discussing it at length.
7-: From The Guthrie Daily Leader (Guthrie, Oklahoma) of Monday 26th September 1898:
There seems to be a universal demand that the war department be packed away in moth balls.
8-: From one of the unconnected paragraphs making up the column Denver Postscripts, published in The Denver Evening Post (Denver, Colorado) of Tuesday 20th June 1899:
“How can we best preserve our cause?” asks a Populist editor of Kansas. Packing it away in moth balls might do the business to your satisfaction, good neighbor.
OUT OF MOTHBALLS
These are, in chronological order, the earliest occurrences of the phrase out of mothballs that I have found:
1-: From Baseball Briefs, published in The Evening Bulletin (Providence, Rhode Island) of Tuesday 6th June 1905:
Dunn’s men have lost three straight games now. It’s about time for Col. Wendelschaefer to get that rabbit’s foot out of moth balls and put it to work.
2-: From the account of a concert given by the U.S. operatic singer David Bispham (1857-1921), published in The Rocky Mountain News (Denver, Colorado) of Friday 3rd November 1905—Danny Deever (1890), a poem by the British novelist, short-story writer and poet Rudyard Kipling (1865-1936), was set to music in 1897 by the German-born U.S. conductor and composer Walter Damrosch (1862-1950):
The “Pirate Song,” a hair-rising thing by Henry Gilbert, was probably inserted in order to stave off the ever-crying need, “Danny Deever,” which is perpetually demanded of Mr. Bispham. But the ruse failed, and calls from the audience and notes sent back of the footlights brought this barbarous and ever-interesting soldier song out of mothballs once more, to the elation of every one, the men in particular, while the tremolo went to one’s spinal column.
3-: From The Richmond Palladium and Sun-Telegram (Richmond, Indiana) of Wednesday 1st May 1907:
During the past month Dan Cupid woke up and took notice that Wayne County, Indiana, is on the map. Taking his bow and arrows out of moth balls the little god got quite busy, and as a result thirty-one couples, whose hearts had been pierced by the darts of Master Cupid, applied to County Clerk Harry E. Penny, for marriage licenses.
4-: From Repine not, gentle reader, for in truth summer’s here; in witness whereof Princess swims again, published in The Kentucky Post (Covington, Kentucky) of Monday 1st April 1912:
Summer is officially inaugurated. It began exactly at 10 a. m. Sunday, when the Princess, the calliope tooting, cast off her moorings and, with much churning of paddles, backed out into the turgid Ohio.
It was the same old summer crowd—pretty girls in white dresses, women with the inevitable lunch baskets, youngsters with sticky faces, generously ice cream coned, the people who lose their hats and miss the boat, the officers who won’t let you put your feet on the railing, and the small boy who sells—
“Pea-nuts, pop-corn, chew-ing gum, an’ san’wiches of oll kinds.”
Nothing was new except the music. Even the “san’wiches of oll kinds” and the ice cream cones had been taken out of moth balls, dusted off, and served in lieu of Sunday dinners.