Cutting the Mustard

"Cut the Mustard" - what does it mean? What are its origins? I have been pondering these questions since I saw the plastic squeezable bottle of mild American mustard on the morning tea table when I came in. How do you cut a liquid - but I think you do - cut whisky for example -which essentially means adding just the right amount of water (maybe ice). But where does "cut the mustard" come few? There is some suggestion that it might be about soldiers being mustered - and only the ones who passed muster were called on to fight - or about not being able to harvest (cut) mustard (plants). Or not being able to cut very tiny round mustard seeds. The general consensus is that if you can't cut the mustard, you can't make the grade, are somehow sub-par etc etc ... but what a funny way to say it.