John, you have to go to the link that goes off of Sheldon's page; but the short answer is to do this:
-on the right side of the bike, the indicator spindle (the tiny chain that comes out) goes through a long-ish nut that has two viewing holes in it
-put the 3 speed into 2nd gear
-spin the adjustment on the cable. Looking through the viewing holes, you should see a solid shaft that is pulled in or out of the axle.
-adjust so that this solid shaft is even with the axle in 2nd gear.
-This assumes that the right side cone was properly set (tighten to finger tight, then 1/2 turn out).

Mike, I used 10W40, not WD40. Actually, I used a rather high end synthetic diesel oil, as it's the only automotive oil I keep around (not that it makes a difference). I'll figure out later on what I want to do with this bike; while I like it, it's too small for me. But thanks for the offer on parts.