A question about a pocket transit

It's a sight level. Normally you hold it on a stick. You should be able to see the bubble level as you sight through, try to hold the bubble in the center as you sight. They are for determining an approximation of differences in elevation, such as on a house lot, farm field, road, ditch, etc. Only as precise as the hand and eye of the user but quite usable for simple cut and fill and grading.

Also called Locke levels, I used a similar one as an inspector on highway construction jobs. The job is staked out along a baseline off the road and profile grade marked on the stake. As the contractor grades the road you can quickly shoot a level from the stakes out of the way and see how close they are. Quite accurate in the right hands over a short shot, very handy tool in heavy highway construction.

Don't know anything about yours but here's a modern version:

http://www.homedepot.com/p/CST-Berger-5-in-Locke-Hand-Level-17-621/100324849#.UVubEcu9KSM