It's a bag you carry on you (bought from provisioners) that salvages Smith & tailor items all at once (quicker than even the UO Assist recycle agent). Plus, for smith items, it returns one more ingot than normal recycling would, for each item.
Check out the
Crafter Help Guides elsewhere in this forum. The Salvage bag is the first entry under the table of contents, and I just edited it to include the info as to where to get the bag, and how to use it (when that essay was originally done, it was being discussed regularly, and was part of the Patch Notes, so that information was common knowledge).