Neat old machine. If it didn't come with a manual you can download it from
http://s2.vsmgroup.com/VSM/Pfaff/pfa...b?OpenDocument which I got to from
http://s2.vsmgroup.com/VSM/Pfaff/pfaffmanual.nsf It isn't a great scan, but I have found that sometimes I can enlarge the view and be able to read it better or at least enough to figure it out. It looks like it was originally a treadle.
I'll sometimes floss the tension discs with dental floss with presser foot up and then lower it to see if it is putting tension on the floss. Check needle inserted correctly -- flat on right as it threads left to right. Make sure threaded correctly both top and bobbin. It looks like the bobbins are wound fairly evenly once the ends that have unraveled are removed. Something else is sometimes the presser bar is not set correctly for the material being sewn.
Looking again at manual and the picture of yours - it appears that yours has an extra doodad on the front plate which isn't shown on manual. Thread should go from spool pin to top of guide and then to tension disc. Hopefully if thread differently it will sew correctly. Maybe someone else has experience with this machine. I'm just going by manual and my experiences with different machines. I've been fairly lucky with the machines I've gotten, as most just need a little cleaning, oiling and very little "tweaking."
Janey - Neat people never make the exciting discoveries I do.