That's your throttle lever. There's a cam inside that case connected to a pushrod. The push rod goes down the center of the engine inside the boiler to the throttle valve located under the steam dome. Pushing the lever foreward pops the valve open and lets steam pressure out the top of the boiler. The piece with the two bolts pushes a fiber gasket in around the shaft and keeps steam from blowing out. It has to be mirrored on the other side if you don't have a photo from that angle.

Not exactly your engine, but here's a diagram of generic controls. Theres also some good animations showing operation of the johnson bar, walschaert valve gear,etc.

http://home.roadrunner.com/~trumpetb/loco/locoworks.html