It's an electronic float switch. When water reaches the two prongs it completes a circuit (just like a mechanical float switch) and turns your bilge pump on. It should be installed vertically, with the prongs facing down and the tips set at the height that you want your bilge pump to turn on. I have one just like it in my boat. Given it's present condition, I would test it first before I mounted it and relied on it. I like mine, simply because there's nothing to foul or jamb like a mechanical switch can. They are a sealed unit, so as long as the prongs are not corroded yours should be okay, but test it just to be safe  .
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1987 V20 w/1987 150HP Yamaha on a Shoreland'r Trailer
1978 16.5 Airslot w/1996 120HP Force on a Four Winns trailer
1996 V21 w/1993 200HP Mercury on a Shoreline Trailer
All towed by a 5.7L Hemi Durango.
If God didn't have a purpose for us we wouldn't be here, so
Live simply, Love generously, Care deeply, Speak kindly.
(Leave the rest to God) 
Silence, in the face of evil, is itself evil. Not to speak is to speak, not to act is to act. God will not hold us guiltless.
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