This exercise comes from Pascual Roch's 1922 Method for Guitar, Volume 2. The three volume Method has been out of print for many decades. It is a Schirmer edition, so one can hope that it will once again come available. If you spot a copy of any of these three volumes, snatch them up. They are terrific both as pedagogical works as well as a small time capsule of pre-Segovia methodology. Roch was primarily a flamencist, but his insight into how a guitar player and the instrument work together transcends genre.
The legato is indicated by means of a curved line connecting two or more notes.
Legato of Two Notes, Ascending
the legato the left hand executes two or more notes, going up or down, when the right hand has plucked only one. As the fingers which produce the legato have a tendency to fall a-way or apart somewhat before the fret, you must prevent it, giving the musical figures their exact value, just as if they were plucked, otherwise they will have the effect of a mordent.
For the legato of two ascending notes, you pluck the first note and then stop the second without plucking it; for the legato of two descending notes, you place the two fingers simultaneously, pluck the first note, and draw back smartly the finger stopping it, so that the second note can sound. For a legato of three or four notes, you pluck the first note and retire the finger stopping it, retiring the other fingers successively, they having been placed at the start on their respective notes.