This type of textile bag with tassels can be found in manuscripts and pictures from the middle of the 13th century to the middle of the 16th century. This is the type of bag that women wore hanging from their belts in long ribbons and it was very often hidden by the over dress.
The look of the bag varies greatly, different kind and amount of tassels, colours and fabrics. The material of the edging and the materials in edging and tassels.
This bag I will show you is based on the simple three stranded flat braid. The look is very similar to the tablet woven edge but much simpler as you do not have to know card weaving to do it. Here is a extant bag with a similar braided edge.
The material of your bag decides how “fine” your bag is and it is possible to make the same kind of bag in silk and in wool, also embroidered bags can be found in the extant findings.
Start by cutting your fabric, I use a wool fabric for the outside that is 19,5*35,5 cm (7,7 * 14 inches) and the lining is a thin linen fabric that is 19,5 * 34,5 cm (7,7 * 13,6) note that the lining is shorter then the outside fabric, it should be so that the lining does not peak out at the top when finished. Seam allowances are included.

Pin both the short sides, with the outside fabric and lining right sides together and sew them with a small running stitch with 1cm (0,4 inch) seam allowance.

Press both seams open like this, you now have a tube of fabric. As you can see I have marked on both sides around the tube, 2cm (0,8 inch) from the edge.

Now you want to press in the 1cm (0,4 inch) seam allowance on both sides around the tube. This is very easily done as you can simply fold the edge until the raw edge meets the 2cm (0,8 inch) markings, what you now have folded in and pressed is your 1cm (0,4 inch) seam allowance.

Turn your fabric tube inside-out and put the wrong sides together, pressing the short sides flat and nice.

Now it is time for the braiding. First you need to cut all the yarn you need, how much depend on the thickness of yam you are using. I use a medium/thin wool yarn. You will do two braids, one longer and one shorter. For my long I have 18 threads that are 2m (2.2yd) long. To my short braid I use 9 threads that are 1,5m (1,6yd) long.

On one end, make a knot so that you have loops in the end.

Cut the other side open.

I use a door handle like this when I braid, to have something to braid against.

You are going to make a simple three strand braid so part your yarn into three equal strands. As you can see you always strive to put the outer threads in the middle. And as you move the outer threads to the inside the threads that where on the inside ends up on the outside. Like this a braid is formed, yes trying to use words to describe braiding is really hard, that is why I made this neat illustration of how you do it!

Start with the long 2m (2,2yd) threads and keep on braiding, as you braid the bottom will become tangled. So now and then make sure that the bottom is untangled, or you are going to have a mess of yarn in the end and a short short braid.

Braid the 2m (2,2yd) long threads until your braid measures 1,2m (1,3 yd)(measure when relaxed) and make a knot.

Trim the end roughly, the rest of the threads will be used for the tassels so save them.

Now take the shorter treads and do the same thing, knot in the end, cut the other side open, divide in three and braid. But this time you braid the full length of the threads.

Then cut the braid in half, unravel the ends a bit for tassels and make knots. there you have the two drawstrings for your purse.

Now we make the tassels, cut a piece of yarn and tie it around the middle of one of the leftover ends from the long braid folded in half.

Make a knot and pull the knot to the top of the tassel, so that you get this look.

Make all three tassels, don’t trim the ends yet.

Now we are back at the sewing, mark two lines at both the short edges, one that is 1 cm (0,4 inch) from the edge and then one that is 1,5cm (0,6 inch) from the first line.
NOTE
I got a question on what I was basing this type of drawstring on, an the simple and honest answer is that I did not look at the extant purses. I simply looked at manuscript pictures and did what felt right and what worked.
What I have found is two bags with the same type of drawstring, but the first a 10th century German relic bag is way out of my time span and the second one is also a German bag but from 1540 so it is a bit on he late side.
This was a stupid thing of me to do, because when I looked and asked around all the extant purses have simply the drawstring pulled trough the outer fabric and lining, no holes made and no eyelets sewn.
Like these extant purses show you.
14th century Sion
Mid 14th century France
1301-1400 Europe Here you can also see what looks like a linen lining.
But one should note that the extant purses have silk cords, and the shell fabric is almost always silk embroidered linen. For a purse like mine with wool strings and wool outer fabric I would suggest that one did sewn eyelets either with linen or silk thread to prolong the life of the drawstring and bag itself.
If you wish to do eyelets instead I would suggest to to them in two levels as this picture shows, as the braided wool cords are a bit on the thick side, or to do your braids a bit thinner. If you do eyelets you can also skip the part about skipping over the tunnel for the drawstring that will come further down, just sew the braid to the bag all the way to the top in stead.
END OF NOTE

Stitch along the lines with small running stitches.

Like this, on both short sides.

Fold the bag in half, lining against lining. Short sides against short sides and pin along the edges.

Take a longer piece of yarn and thread it on a needle. Knot the end of the yarn and starting from the inside of the bag, between the lining and outer fabric, pull the tread trough.

We are now going to attach the long braid, that also is your carrying strap at the same time as we sew together the lining and outside fabric. Pull the needle right trough your braid like this.

Make sure to catch both the lining and outer layers. Go straight trough the braid, and take a stitch right trough the bag, angle it slightly upward to the other side and pull the tread trough as far away from the first stitch as you choose.

Sew like this along the length of the bag, stopping only at the channel for the drawstring that you stitched before, there go trough the layers. Then when you have passed the channel continue your sewing until you reach the top edge, there fasten the treads.
Do the exact same thing on the other side of the bag, before sewing the braid make sure that it is not twisted.

Divide the bottom part of the bag in three and attach the tassels.

Take one of your short braids and tread it trough one side of the channel with the help of a safety pin, go under the big braid and thread the braid trough the other channel as well.

Like this!

To the same thing with the other braid as well. Now you have a functional drawstring!

Pull the bag shut and then trim the tassels all around. I like it when my tassels are bigger in the middle and gradually gets shorter to the sides, but that is just personal preference.

Now it is done! Put it on your belt and feel happy! I have mine hanging from a purse hanger that I got at Historiska Fynd.