What's the meaning of "stained with a blue bag" in this text?

In a story titled "Prelude" written by "Katherine Mansfield", I came across the following paragraph:

After tea Kezia wandered back to their own house. Slowly she walked up the back steps, and through the scullery into the kitchen. Nothing was left in it but a lump of gritty yellow soap in one corner of the kitchen window sill and a piece of flannel stained with a blue bag in another.

Please somebody shed some light on the meaning of "a piece of flannel stained with a blue bag".

At the time Katherine Mansfield was writing, a blue bag, I recall, was put in with clothes while they were being washed to make them come out looking whiter. I imagine that if the bag stayed in contact with any piece of clothing for too long it would leave a stain.