Like any major city today, 16th century London had its fair share of crime. Elizabethan London was full of cut-purses, many of whom worked in organized bands.
In the year 1585, it was discovered that a school to train young cut-purses was being run at a tavern in Billingsgate. The school was being run by a Mr. Wotton, an ex-merchant turned criminal mentor (think of him as a 16th century Fagan).
One of the ways Mr. Wotton honed his aspiring criminals skills was by having them practice lifting coins from a purse that had bells sewn onto it, without ever making a sound. When the junior cut-purses could do this successfully, they were ready to be released into the wider world, preying upon wealthy theatregoers in the playhouses. These boys "nipped a bung" in the city, which was criminal slang for cutting a purse.