PURPOSE: To aim at enhancing the productivity and saving labor, by moving a holding mechanism for a dish cloth or the like to the next receiving position when the holding mechanism at a predetermined position reaches a sufficient height, and then by successively operating the mechanism.

CONSTITUTION: A dish cloth 1 from a cloth outlet swing-down roll 3 is held between folding blades 11 after passing through a dish cloth tension adjusting bar 10 on an folding mechanism upper section frame 8, and is then subjected to left and right sliding motion and while it is fixed at its left side by means of a needle bed 14 on an arm 13 so that it is folded and stacked on a pallet 15. Further, when a cloth height detector 19 detects a predetermined height of the folded and stacked cloth, an automatic cutter 21 cuts a joint of the cloth with the timing of a cutting position by a joint detector 20. Thereafter, the folding mechanism 8 is moved along a rail 7 to above the next pallet receiving bed 16 in order to repeat the similar folding and stacking steps, and the cloth is cut at a joint in accordance with detection signals from the cloth height detector 19 and the joint detector 20. Then the mechanism 8 is returned to above the original pallet receiving bed 16 to successively fold the cloth. Thus, it is possible to enhance the productivity and to save labor.