That rear derailleur should be in a museum. Here's an excerpt from Disraeli Gears:

"It is low-normal ... and it had only one spring, which provides both chain tension and operates the parallelogram...

"The 1967 SunTour Skitter gets the adjustable pulley cage ... with a few twists of a handy wing-bolt, the tension pulley can be moved to one of three positions giving a maximum capacity of 26, 30 or 34 teeth.., an early ancestor of SunTour’s ‘Quick Cage’ - which allowed you to fit the chain into the derailleur without messing around with extracting a chain rivet."