Old most of the smaller units are just a tachometer to tell you the PTO shaft speed and then a pressure gauge that is marked in horsepower at certain PTO speeds. So the pressure gauge is measuring torque and the tachometer PTO shaft speed. The internals are a hydraulic pump with a valve to restrict the out put so the pressure goes up. That creates the torque/pressure the gauge reads.
They are accurate if you do not slow the PTO speed under the rated speed. Guys used to "cheat". Most farmers would watch the horsepower/pressure gauge and not the PTO speed so the operator would pull the PTO speed under the rated speed. This would make the torque be higher but not the actual horse power.
Example: Lets say a tractor was rated at 75 PTO horsepower. IF it has a 540 RPM PTO your reading would only be correct at 540 RPM. So if you pulled the PTO speed down to 500 then the gauge might show the tractor had 80 PTO horsepower.
A neighboring JD dealer here, had customers convinced he had JD set his ordered tractors at a HIGH horsepower. He would prove it to them by Dynoing the tractors for them. HE would stand with his hand over the PTO speed gauge. Not very many ever realized he was scamming them.
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