This image shows you how we used to print 2-color in letterpress days.

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The two flags on the left print blue, the two on the right red, on top of one another — in register. Together they make a couple of union flags. You might sometimes, to save money, print the blue image in black, like the text — that would still suggest the right thing. Printers would keep blocks like this standing (i.e. kept in storage) and would take them out whenever they had an order calling for the flags. Other blocks would also be kept — “SALE” or “MENU” etc. — whatever could be counted on to be called for at some time in the future. These were often hand cut in wood, though they would usually be engraved in metal.