What Tom said matched my understanding. They were used in small general 
stores to cut plugs of tobacco to any length the customer wanted (or had 
the money for). The one I destroyed had that knife pinned to a small 
standoff mounted to a small wooden board with a wood fence on one edge. 
There was a extension on the opposite end from the handle with a pivot 
hole in it that I hacksawed off and filed clean. Was not sharpened. More 
like a tobacco pincher than cutter.

-JP