In medieval times the appearance of a caul on a newborn baby was seen as a sign of good luck. It was considered an omen that the child was destined for greatness. Gathering the caul onto paper was considered an important tradition of childbirth: the midwife would rub a sheet of paper across the baby's head and face, pressing the material of the caul onto the paper. The caul would then be presented to the mother, to be kept as an heirloom.
Over the course of European history, a popular legend developed suggesting that possession of a baby's caul would give its bearer good luck and protect that person from death by drowning. Cauls were therefore highly prized by sailors. Medieval women often sold these cauls to sailors for large sums of money; a caul was regarded as a valuable talisman.
I was born with a caul, which was advertised for sale, in the newspapers, at the low price of fifteen guineas. Whether sea-going people were short of money about that time, or were short of faith and preferred cork jackets, I don't know; all I know is, that there was but one solitary bidding, and that was from an attorney connected with the bill-broking business, who offered two pounds in cash, and the balance in sherry, but declined to be guaranteed from drowning on any higher bargain. Consequently the advertisement was withdrawn at a dead loss ... and ten years afterwards, the caul was put up in a raffle down in our part of the country, to fifty members at half-a-crown a head, the winner to spend five shillings. I was present myself, and I remember to have felt quite uncomfortable and confused, at a part of myself being disposed of in that way. The caul was won, I recollect, by an old lady with a hand-basket, ... It is a fact which will be long remembered as remarkable down there, that she was never drowned, but died triumphantly in bed, at ninety-two. (Charles Dickens, David Copperfield)
Other legends also developed. One popular legend went that a caulbearer would be able to see the future. A different legend held that a child born in caul would grow up to be a vampire if the caul was not disposed of properly.