As noted above by Bob, this is a Pickering mill engine governor. the additional pulley rides on the belt, kept up by belt tension. It is fail safe in that if the belt breaks, the governor closes and cuts off the steam. In addition you will see it is fitted with a sawyers valve. This usually had a rope from each end to the saw (or machine) which allowed the operator to increase or decrease the governed speed at will, or effectively stop the engine.
