Bag

A bag is a very primitive but useful method of transporting numerous objects. Items can be simply dropped into it, and then the bag can be either carried or fastened at the belt. When carrying a greater number of items, however, a backpack is probably better-suited for organizational purposes. They appear in Ultima VI, Martian Dreams, Ultima Underworld, Ultima VII, Ultima Underworld II, Ultima VII Part Two, Ultima VIII and Ultima IX.

History
Bags first appeared in Ultima VI, and were also available in similar form in later games of the series, though they could always be either found or bought for a small price. Secondary to backpacks for transporting items, they helped to organize items inside the backpack itself, in order to prevent it all becoming a hige mess and frustrating the Avatar while looking for the correct item.

Bags played a huge role in Necromancy on Pagan in Ultima VIII. In this school of magic, the reagents had to be put into a bag and then treated with the Key of the Caretaker in order to create spells. Without a bag, the Necromancer couldn't do magic.

By the time of Ultima IX, bags were very important to enlarge the limited backpack space, which was fixed at 20 items of any size and mass, with nine more items each. But contrary to earlier times only very few were found during the journey, making bags a surprisingly valuable and important find.

Trivia

 * Bags actually are an excellent way to keep the inventory organized, especially in the later installments, which tend to accumulate lots of items the Avatar has to hold upon. Serpent Isle is especially notorious for that.
 * The fan made economy patch for Ultima IX allows one to buy bags from provisioners and certain magic shops for a price of around 670 gold, plus or minus 20.