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Actually, the correct term is "panning." Cross-fading is what DJs do when they mix LPs together.
There are an awful lot of novelty-style "EZ Listening" Lps from the early days of stereo that go crazy with this stuff; it was certainly around before psychedelia hit the scene. When stereo was first introduced, quite a lot of records were made to sort of "demonstrate" its dimensionality, with mixed results.
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