It's a Cinch Bag by Jane Davis
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It's a Cinch Bag

Knitting
May 2004
Aran (8 wpi) ?
21 stitches and 28 rows = 4 inches
in Stockinette in the round, on larger needles
US 4 - 3.5 mm
US 6 - 4.0 mm
150 yards (137 m)
circumference: 18-1/4"

Tasseled bag with i-cord drawstring. This bag is knitted at a tighter than usual gauge for the yarn to make it sturdy. The yarn used in the project is discontinued. Possible substitutions include smooth aran weight, plied wool and silk blends, with a touch of cashmere if you can find it.

From the pattern description:

“This little treasure bag is a cinch to knit and a great learning project. Made from the top down on circular needles (then on double points as needed), this project is a great way to practice ribbing, yarn overs, and decreases for sock knitting. And best of all, you needn’t make heels or a mate.”