Eugen Schüfftan was the inventor of the process now known with his name, the ancestor of the travelling matte and the bluescreen effect. It was used mainly in the first half of the 20th century, to create the illusion that the actor is on a stage with a fantastic background.
The famous German cinematographer refined this effect when he was working on the Metropolis movie by Fritz Lang, released in 1927. There is evidence that other movie technicians made use of this effect before Metropolis, but not with the same success. Fritz Lang, as director, desired to introduce shots of skyscrapers and other fantastic buildings in the backgrounds of the scenes.
Schüftan used some special mirrors, which transformed the shots of the miniature skyscrapers into the huge and realistic background still appreciated to this day in the movie. He achieved this effect by inserting a plate of glass tilted at a 45 degree angle, right between the camera and the miniature skyscrapers. He used the viewfinder of the camera to outline the glass area where the actors would be placed. The outline of the actors would be translated onto a mirror, and the reflective areas would be removed, leaving once again transparent glass surface. When the glass with the actors would be placed in the original camera with the skyscrapers, the parts would blend in, and it would reflect the stage behind the actors. The actors would be placed a few metres away from the mirror, to create the desired size ratio between them and the proportions of the skyscrapers.
Many directors, including Alfred Hitchcock (in 1929, in Blackmail and The 39 Steps, in 1935) or Peter Jackson (in The Lord of the Rings: The Return of the King, in 2003) used this process. Throughout the years, the process was replaced by the matte shots technique, allowing directors to match shots filmed at different times and adjust them in post production.