Jim's got it pretty well covered. The wire from the external coil down to the distributor (the cap end of your magneto is a distributor) should be hooked to the pole of the coil marked the same as your chassis ground. The other pole of the coil runs back yo your ignitions switch just the same as if she had battery ignition right from the factory.
Curious as to whether the battery is 6 or 12v, and if 12 whether you have a generator or an alternator on it? In the days when 6v was common, so was positive ground. When 12v came along with the alternator, ground was conventionally switched to negative. My only thought bringing that up is that if somebody put a 12v battery in but left a 6v generator on, that might explain the charging issue.
If the genny/alternator are sized for the battery, then John T's checklist is a good way to start tracking down your problem. If it is 12v with an alternator, thene you will need to make a small variation in the wiring from that shown in the IH manuals. For that go to BobM's very excellent diagrams and look for the one that applies. I think #5 will be the most informative for that case.
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