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I was given this by my mother and was told it was my great grandmothers. I trust my mom but it is inexcellent condition and just want to verify the information that she possibly was given. If anyone could verify what it is and what it was used for along with the time period I would appreciate it. I was told it was used to hold ladies "delicates." The design on the fabric is interesting as well for it to be as old as it supposedly is.
When was your great-grandmother born and when did she die? This would help in trying to date the bag. Also, sometimes we assume that if an item belonged to "x" generation that it must have belonged to the person when s/he was young. For example my mother was born in 1905 and died in 2001. When she died she might have owned something that became hers in 1906 or in 2000 or anywhere in between.
From the design I can note a few things: 1. This is hand made. 2. Whomever made it was skilled at fine crochet or possibly tatting (lace making). 3. Based on fabric style and colors it appears to be from the American Art Deco Period (roughly) 1920-1940.
I've not seen anything made in that specific shape before. You may need folks with more expertise in vintage and antique linens to learn more.