The first thing you need to decide is whether it is important to keep the tractor as original or update it to a better fuctioning style PTO. Yours is the orininal style "dog clutch", small output shaft, no extension housing PTO. The latest style had a splined engagement clutch, larger and longer shaft with an extended rear housing. The swinging drawbar is also about 6 inches longer. There was also a second style that had either the splined clutch or the larger shaft, I dont recall which change they made first. If you want to keep it original you will need to have the parts rebuilt. To do a good job will require removing the transmission counter shaft along with the PTO. The whole job can be done without splitting the tractor but if you have the right equipment it can be easier to split it. Much less working from underneather the clutch housing. The counter shaft will come out with the gears installed on it but you have to remove both the front and rear bearings from it. My dad had a 1940 model and he would weld up the PTO end of the dog clutch about once a year. It always kept lasting less time on each repair. He finaly put in a new counter shaft in the transmission and used the PTO out of the 1943 he had with a loader.
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