It was original POS ground meaning the coils - gets voltage via the ignition switch while its + wires to distributor. If polarity got swapped (like alternator use) then its reversed.
Yes indeed when the points are closed if they are providing a good ground voltage should go to zero. The current path is from the coils low output to dist terminal,,,,,,,,to and through the distributors side insulated pass through bushing,,,,,,,,,,,,,,to the points terminal,,,,,,,,,,,,,to the round metal base,,,,,to distributor,,,,,,,,,,to frame ground to battery when closed.
Insure wiring and continuity from the coils output to and through the plastic bushing to the points terminal.
The distributor itself needs a good ground to the tractor frame as does the round steel plate upon which the points are
mounted. See if the round metal plate where points mount has good continuity to frame and, of course, to the grounded
battery post. Check any braided grounding strap..
Check the continuity and resistance through the points when closed, should be near zero ohms resistance if they are not burned and closing with good contact AND THEN IT HAS TO GET TO THE ROUND METAL BASE THEN THE DISTRIBUTOR THEN FRAME GROUND TO BATTERY............
NOTE you say 12 volts inside the distributor and at the points THEREFORE the wiring and pass thru bushing must be okay, but if the points close good and aren't burned voltage should go to zero IFFFFFFFFFF the round mounting plate and any ground wire and the distributor are effectively grounded??? Paint or rust or anything preventing a good distributor ground????
With ignition on take a jumper wire to the coils low output to distributor terminal and each time you touch it to ground then remove it the coil should fire SAME AS IF POINTS CLOSED THEN OPENED Does it fire if jumpered????? if so the coils not getting a good ground via the closed points and round base then dist then ground
CHECK THE POINTS for good low resistance continuity when closed, maybe points is your only problem assuming they close good n tight ???
If all else fails see my Ignition Troubleshooting Procedure but shes never gonna fire until theres good low resistance from the coil to the points to ground to battery
John T
John Ts Ignition Testing