History? That's my cue to trot out this picture again. Here's Prof Karapetoff with the Neutrowe Gray Card in '39 or '40. It was 14% grey, and that was decided on by looking at pictures made by metering different cards and deciding which ones looked right. As Roger says, it was intended for use with colour film: Kodachrome.
Dead Link Removed
If you want a standard reference, the palm of your hand makes a convenient alternative to a grey card, if you don't have an incident meter. The incident meter, with a dome (cardioid responce) instead of a flat (cosine response) receptor, has the advantage of being better able to measure light from a variety of directions at once.
"...its relevance to metering is slight, as no speed criterion ever has been based on a mid-tone. Speeds for negative materials are based on shadow detail,..."
Well, that's a bit of a grey area. There is a technique known as Aim Density that uses the density of a grey card exposure as the determining factor for speed. It's used in cinematography with colour negative materials, and there are a few variations. It uses midtones, because they tend to be the most important tones in most movies. Well anyway, that's what I think. There is no ISO for the speed of colour negative motion picture film, by the way, so a manufacturer could use midtone criterion for the determination of a recommended EI if they so wished.
This is how one variation it works, in brief. Years ago EK were kind enough to give me a week's (free) workshop in the practical use of it for conventionally printed film and for telecine'd film.
The film manufacturer gives you red, green and blue Status M aim densities for a grey card. You expose a grey card at different effective meter settings, using your meters, in third-stop intervals. Then you measure the Status M densities and find the setting that came closest to the recommended values for each layer. The speed is calculated by voting: eg 250, 320, 320 means 320. Then you use that as your basis for the rest of your film testing, which is a mixture of numbers and appearance, and which is the larger part of the exercise.
Best,
Helen