The Collaborative International Dictionary of English v.0.48:

Foolscap \Fools"cap`\, n. [So called from the watermark of a
   fool's cap and bells used by old paper makers. See Fool's
   cap, under Fool.]
   A writing paper made in sheets, ordinarily 16 x 13 inches,
   and folded so as to make a page 13 x 8 inches. See Paper.
   [1913 Webster]

WordNet (r) 3.0 (2006):

foolscap
    n 1: a size of paper used especially in Britain