The 706 has a resistor wire between the ignition switch and the I terminal on the solenoid. That wire serves as the ignition resistor. When the solenoid is engaged the I terminal is also connected to battery voltage internally to supply cranking voltage to the coil for a better spark while cranking.
The I terminal at the solenoid should have two wires connected to it. They are probably joined together in the terminal that connects to the solenoid. The S terminal has only one wire going to it. The S terminal needs battery voltage applied to it to engage the solenoid. The I terminal is energized by the solenoid while the starter is engaged to supply 12 volts to the coil while cranking. With the engine running you should have about 6 volts at the I terminal since power is supplied by the ignition switch but it is coming down the high resistance wire which serves as the ignition resistor.
If you were to connect the fuel cut off solenoid to the I terminal at the starter you would not be getting 12 volts once the starter disengaged and most likely the engine would not stay running. The power needs to come from up at the ignition switch and not the starter.
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