It would seem that this is a "cutout" switch. The telegraph instruments would connect to A and B. The line would connect to L1 and L2. With the switch lever positioned as shown, the instruments are connected in series with the line. As the switch lever is raised (see other picture) the two levers short the line, maintaining continuity. When the levers are dropped onto R a larger contact area keeps the line closed. Terminal G would be connected to earth ground. If desired, during a storm, Peg P can be removed from the left storage position and placed in the hole between G and L1.