Jean,
The controller is just a switch. It doesn't really matter which way you wire it.
From what I've seen on my machines, and what your picture shows, someone has unhooked the wire from the connector block and turned it around using the connector block rings on the controller. Look at how burnt the wires are. There is usually a heat shield around the wires where the lay against the controller to prevent them from burning up like those on your machine did.
Did you buy a cord set with the plug block? Sew-Classic Part #SCE123 {
http://www.shop.sew-classic.com/Cord...ers-SCE123.htm } If so then just connect the wires to the controller and you're good to go.
If you can find some heat shield tubes do use them, otherwise try not to let the controller get really hot.
Joe
Joe