To set things straight, a 'kidney dagger' is simply a Victorian term used to detract from the genitally associated 'bollock dagger' term for a dagger form used from 13th-18th c.
This little dagger seems more a regalia oriented accoutrement from possibly some fraternal order or group, in the manner of the broader spectrum of Freemasonry et al.
The initials with wreath surround seem to reflect this type of neo-classic ornamentation in accord with notes by I.P. I very much agree with European, and the observation on the bayonet scabbard.
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