They built up a major international brand, with various lesser rivals, notably Mrs. Stewart's liquid bluing Laundry bluing is made of a colloid of ferric ferrocyanide (blue iron salt, also referred to as "Prussian blue") in water.

As others have noted, "blue-bag" has been used in connection with laundry bluing since at least the 1860s. From " Purple Dyeing, Ancient and Modern," translated from a German article in Aus der Natur (not later than 1864) and printed in Annual Report of the Board of Regents of the Smithsonian Institution, Showing the Operations, Expenditures, and Condition of the Institution for the Year 1863 (1872): The little blue bag was stirred around in the final rinse water on washday. It disguised any hint of yellow and helped the household linen look whiter than white. The main ingredients were synthetic ultramarine and baking soda, and the original "squares" weighed an ounce and cost 1 penny. Many well remember that some of the smart ditties that our Marie warbled ere more or less tinged with squeezes from what the dear girl herself called " the blue bag." This Ngram find references "blue bag" multiple times, using it in a way that makes me suspect it's a term for some specific type of luggage. There was a well known intellectual property dispute between two manufactures of this type of product. The legal action arising from this is still cited in English law disputes. (Ironically, the two companies later merged with each other!)And earlier still, from Albert Chevalier, Before I Forget: The Autobiography of a Chevalier D'industrie (1901): Performers in the music-hall era seem to have viewed the "blue bag" not as a receptacle to pull naughty innuendo about naked bunnies out of, but as the familiar nineteenth- and early twentieth-century laundry aid—a cake of bluing tied in a cloth bag and immersed briefly in cold rinse water to help make white clothes look less yellow or dingy, or applied to an insect sting to make it less painful. THE USE OF BLUE, AND THE ABUSE. Much blue is very objectionable. Dip the blue-bag into the [clean, cold rinsing] water until it is just perceivable that it has been in.

Seeker" wants a remedy for bung eyes. I have tried different remedies, but the best is the blue bag (washing blue) as soon as the eye is stung. Wet the blue bag and apply to where the eye is stung. I don't think it hurts the eyesight. I have three children, and if a fly stings them, they come in at once for the blue bag. It stops the swelling at once, and it seems to take all the pain away. It is impossible for art, with the tiniest "a," to thrive very long in our music-halls under existing conditions. It may occasionally come as a surprise, and for that reason even please for a time ; but it cannot and will not find a home there until the "Blue Bag" yields to the "Blue Pencil." I am not narrow-minded. If certain blasé individuals with jaded palates want spice, give it to them—let them wallow in it ; but see that it is in a place set apart, not in a hall where each programme contains a dead-letter footnote, requesting the audience to report to the management anything objectionable in the entertainment. Let the prurient-minded have a hall to themselves. Call it the Obscenity, but for the sake of the majority—the lovers of clean, wholesome amusement—make it an offense, punishable at law, for anyone to encroach on the prerogative of those engaged in pandering to the tastes of the Dirty and Depraved. E.N.S.A. shows are blue!” So are many of the shows given in music-halls in England. No E.N.S.A. show is blue at its final rehearsal at Drury Lane, that I can swear. Each show is vetted and vetted most carefully. Manuscripts have to be submitted, and the blue pencil is not spared when objectionable matter is found. If, after the show has gone out, either at home or overseas, the “blue bag” is used too freely that is the fault of the party manager, or going further, the fault of any E.N.S.A. officer who sees the show and hears “smut” and does not prohibit it. Dirt is not wished for, it is not permitted and if everyone concerned did their duty as they should do it it would all be eliminated. Remember there will always be “comics” who like to push in a dirty gag and get a cheap laugh . . . In additional to laundry, I use soapnuts everyday – for natural rubber-glove-free washing up, surface cleaning, the loos, glass and shiny things. True Indigo

City of Moorabbin Historical Society (Operating the Box Cottage Museum) Book, Carroll, Brian, Early Melbourne sketchbook, 1977 In this reference the term "blue bag" is apparently used to mean a small flannel bag in which you place a ball of "bluing". This is then added to a load of laundry "whites" to help neutralize yellowing.