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The material is cotton (not polyester) and the color is white. Considering the age, the item is in a very good condition (see scans).
It measures 25x25mm (0.98 inch).
In ancient times the monogram embroidery were used to mark the own clothes with the appropriate initiales, but also to decorate napkins, handkerchiefs, linen etc.. but you may use it also in picture frame, birthday cards, keyholder, spectacle case etc..