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Does anyone know what this font is called?
Custom, hand-drawn, but based on Victorian woodtype and steelplate lettering.
This foundry specializes in revivals of that era's type: http://www.letterheadfonts.com
Picking and choosing from among their fonts will give you decent matches to the OLVE in your sample.
As for the split-end initial caps, I know I've seen something similar in type specimen books from the late 19th century, but I'll have to do more research.
EDIT--Letterhead Fonts "Billhead" might give you a base W and S that you can adapt to create similar Tuscan initials.
_W_ and _S_ are not based on a font.
They are a monoline version of a very common lettering style called Tuscan. In Tuscan the split ends can take many forms that resemble anything from a mustache, to balloons, to the boxy split seen on these letters.
Here are a few fonts with ends like this: Frisco Antique SG http://www.myfonts.com/fonts/spiecegraphics/frisco-antique-display-sg/ Saloon Girl http://www.myfonts.com/fonts/fontmesa/saloon-girl/ and URW Woodtype http://www.myfonts.com/fonts/urw/wood-type/.
The holes punched at the crotch of the split ends were a commonly used technique in making a Victorian decorative letter. These circular bites can appear at many places on a letter. See for example Alt Gotisch http://www.myfonts.com/fonts/hihretrofonts/alt-gotisch/
Thanks for the help!