A great improvement in papermaking helped to usher in the new 'shaded' watermarks. Around 1750, John Baskerville discovered how to produce paper without the texture created by the paper moulds then in use throughout Europe. His 'discovery' of what came to be known as wove paper was actually a 'rediscovery' of an ages old Oriental method. And, in fact, some scholars believe that Baskerville's 'discovery' was a couple years later than when the Whatman (later Balston) paper mill at Maidstone in Kent, England was producing the same type of paper. In any case, the 'wove' paper was made using a paper mould which was covered with a fine brass screen, woven on a loom in the same manner as cloth, and hence its name. The evenly textured surface of the wove paper, unlike that of the previously used laid paper, permitted greater detail in watermarks because the exterior texture of the paper itself did not conflict with the watermark image.

   As early as 1812 the Johannot paper mill in Annonay, Ardeche, France was producing a sort of light & shade watermark in which the woven wire was pressed so that the pulp stock would be held in two degrees of density or thickness. This technique produced a dark background against which a single wire design would be highlighted, thereby producing the so-called 'light and shade" effect. These watermarks, though, were still basically two-dimensional in design employing the bent and shaped wire of the traditional watermark.

   The next major step in the history of watermarks came in the late Eighteenth and early Nineteenth Centuries with the introduction of finer mesh brass screens. The finer mesh allowed more detail to be captured when a shape was pressed into it. And that is exactly what papermakers began to do. They continued to shape and bend wire to form images, but instead of attaching the shaped wire to the screen, they pressed the shaped wire into the screen itself.

   An Englishman by the name of William Henry Smith is often credited with having created the first light & shade watermark in 1848 by taking the idea of pressing a shape into the wire mesh screen of the paper mold a step farther than the work that had been down at the Johannot mill. Smith rightly guessed that if the shape that was pressed into the wire mesh screen contained a bas relief surface rather than a flat one, the resulting impression would take on the relief itself and the deepest areas would accumulate more pulp fibers than the thinnest ones.

   Those first light & shade watermarks were created by carving a relief sculpture into a plate of wax. The earliest plates were probably then covered with a plaster coating or cast, which would have been filled with molten bronze to create a casting by the 'lost-wax' method. Later, to replace the lost-wax method, an electrotype would be made of the wax relief by covering the surface completely with a coating of powdered graphite (or plumbago) and then electrochemically bonding copper sulphate to it. (A similar means to create the plate is the galvanoplastic method in which a wax sheet is electrochemically covered with a metal by immersing it in a galvanic bath.) The resulting electrotype plate, which would measure approximately one thirty-second of an inch in thickness, would be backed by a quarter inch thick plate of lead to hold it rigid. The plate would then be pressed into the woven brass wire screen (containing 48 to 60 wires to the inch) of the paper mould, which would be annealed prior to the pressing in order that the individual 'threads' of brass would not break. Initially, the relief of the papermark would be imparted to the wire screen of the paper mould by laying the brass fabric over the papermark and then using burnishing tools to make the impression. Later, it was discovered that if a corresponding matrix plate would be created to match the original die, the wire mesh screen fabric could be pressed between the two plates.

   Scholars at the Paper and Watermark Museum at Fabriano, Italy, referring to shaded and tonal watermarks, have stated that, at least in the Fabriano mills "It is almost certain that the first punches were prepared, in the mid 19th Century, by sculpting the image in ‘positive’ on a surface of a hard wood slab (walnut, cherry and box-wood trees). The term ‘punches’ refers to the papermark plates used to impart the design onto the wire mesh fabric. A bronze sheet, or wire mesh fabric was first annealed, and then positioned over the wooden punch. Then the sculpted image was impressed onto the wire mesh fabric by placing a felt cushion over it and pounding the two together, or in their terminology 'forging' the two, with a hammer.

   One of the chief benefits of this method of making the papermark plates was that the same watermark design could be repeated across the paper mould with each repetition being the same as the first - a feat rarely possible with the handmade wire papermark.

   The widespread interest in watermarks of the light & shade type created a demand for better paper so that the watermark would show up nicely. The papermakers discovered that short fibered pulp produced the best results with a light & shade watermark.

   A ban was instituted in 1887 by the Japanese government against the creation of light & shade watermarks by anyone other than the official Bank Note Office. Shorthly thereafter, in 1889, papermakers in Japan, in an effort to devise an alternative method by which they could produce watermarks of light and dark areas, came up with the process known as tesuri-kako-ho, (i.e. hand rubbing). This method, which is still used today by some Japanese manufacturers of paper wall panels, consists of creating a plate in which dark areas are defined by areas of parallel grooves, into which short fibers of pulp are introduced by rubbing the pulp with a succession of coarse to fine materials.

   According to research performed by Dard Hunter, light & shade watermarks were best produced on a hand mould or on a cylinder-mould paper machine. It was his opinion that watermarks produced in paper formed on a fourdrinier paper machine employing a dandy roll would be "...usually somewhat dull and lacking in contrast and brilliance."