I've always got an eye out for an old sailor made basket; I love the look of them, and especially love the vision of a sailor executing macrame knotwork with fishing twine to pass the time and have a gift bring home to his sweetheart. And this one is about the smallest in scale that I've seen, neat and concise, with very sweet scalloped edges around the side edge of the lid and again around the foot of the basket. The hole at the very center of the lid (from which radiate more holes, making patterns like rays of the sun) suggests to me that perhaps it was made as a string/thread holder, to hold a spool inside, the end of which would be pulled out through the center hole. I'm not entirely certain, but the scale and manner of the basket sure do suggest it--and definitely a nice little sewing basket whatever the case. 

3 1/2" d x 2 3/8" t.  Very good antique condition, late 19th century I believe, varnish over cotton string, sturdy and sound and generally stiff, with no slumping.