the amp gauge was showing a discharge. So I pulled the inspection cover off , and the armature was all dirty, so I sprayed an electrical safe cleaner, and it seemed to have cleaned it. Starting up again the digital multimeter reads seven volts on the generator side and six volts opposite the cut out. Amp gauge barely reads 2 amps . Is this good ?
The voltage drop across your cutout is what I would expect if it uses an ordinary silicon diode.
Charge current should be set to about 5A. Dashboard ammeters are not noted for their accuracy, so an analog multimeter with a 10A range is a better way to check the current. Note that if your generator has the original brush plate it might crumble away when you adjust the current. Of course, if the generator is unknown, it might be more than just a 3rd brush adjustment required.
Taking measurments with a digital meter can also produce erroneous results when measuring a Model T electrical system, though it seems yours is probably OK.
Where does the needle on the ammeter rest when the ignition switch is off and the battery cable is removed from the battery post? Sometimes the T ammeters are off and the needle reads either discharge or charge when no current is passing. If your ammeter reads toward discharge when the battery cable is off, you could be over 2 amps when it is charging. Anyway, what I am trying to say is that you need to read 5 amps above the point where the needle rests with no current.