Gary,
The first patent for a "hollow auger to cut holes" was given to "A. Cole" in 1897.
I am reading "St. Andrews Home of Golf' by James K Robertson. On page 71 he writes "when the first patent hole cutter was invented about 1869 by Charles Anderson, Fettykil, he presented it as a tribute to (Old Tom) Morris.
Pete,
I think I may have been referencing the first patented one in the US, but I didn't save the info and I don't remember where I got it.
The first hole cutter is in the possession of Royal Musselburgh GC and it dates from 1829. They believe that it's probably the oldest one in existence. Doesn't appear that Robertson got it right either.