It is a standard case to hold an officer's sword and scabbard. Marine Corps does the same thing. I have two of them (one each for the Marines and Navy) The initials are those of the original officer who owned it.
"All that the South has ever desired was that the Union, as established by our forefathers, should be preserved, and that the government, as originally organized, should be administered in purity and truth." – Robert E. Lee
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