This harks back to the earliest days where these was just a bridge pickup.
Switch Positions:
1. The first position sends the pickup through the Volume control only and bypasses the Tone control. Avoiding the Tone control results in a brighter tone. The first position produces the brightest tone available from the Esquire.
2. The second position is in the middle and it runs the pickup through the Volume and Tone controls. This circuit is the same as Position 1 of the Fender Telecaster. The sound is still very bright but it’s warmer than Position 1.
3. In Position 3, the pickup goes through the Volume and into a treble roll-off circuit. It does not use the Tone control in this position.