The solenoid S terminal does not supply power to anything. Your ignition switch (or starter button, which ever you have) supplies the power; the S terminal of the solenoid receives that power to make the solenoid contacts close to turn the starter. There are several wires inside that taped up harness and they are not all interconnected, they come from, and go, to different places for different functions. The tape just holds them together as a "harness". One wire should go from the start terminal of the ignition switch to one terminal on the neutral switch. Then a wire goes from the other terminal of the neutral switch to the S terminal of the solenoid.
The start wire has nothing to do with the alternator, regulator, or instrument panel, it just happens to run in the same harness. You should only have power on the solenoid S terminal when the key is in the start position or the starter button is pushed. If it had power all the time the key is on the starter would blow up in short order with the engine running. To my knowledge you tractor does not have a clutch safety switch, just the transmission neutral switch, so no, you do not need to push the clutch for the starter to work.
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Today's Featured Article - An Old-Time Tractor Demonstration - by Kim Pratt. Sam was born in rural Kansas in 1926. His dad was a hard-working farmer and the children worked hard everyday to help ends meet. In the rural area he grew up in, the highlight of the week was Saturday when many people took a break from their work to go to town. It was on one such Saturday in the early 1940's when Sam was 16 years old that he ended up in Dennison, Kansas to watch a demonstration of a new tractor being put on by a local dealer. It was an Allis-Chalmers tractor dealership,
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