The #1 terminal is the "excite", which is normally supplied from a switched 12v source, usually from the charge indicator light.
The #2 terminal is the "sense", which is normally supplied from an always hot source.
Connecting these two terminals together and connecting them to the blue/black wire AND by-passing the charge indicator lamp will cause voltage to back feed through the blue/black wire and to the ignition system.
Putting the charge indicator light back into the circuit will cause the #2 "sense" terminal to receive a lower than normal voltage signal, and will cause higher than normal charging system voltages. The #2 wire needs to be connected to a 12v source, preferably unswitched.
John
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