Blue wire(s) supplies power to the positive terminals of the coils with the ignition key on and the points closed. There should be two separate feeds, one to each positive terminal. White connects negative terminals to ground through the closed points. When the points open current stops flowing, the magnetic field collapses, and a high voltage pulse is sent to the respective plugs.
There should be low resistance between the positive and negative terminals of each coil with all wires removed. There should be HIGH resistance between the negative terminals and the coil center tower. on the order of a couple of thousand ohms. If you show an open circuit, (infinite ohms) the secondary winding is broken and the coil is no good. If you show low ohms, it is grounded to the primary winding and again no good.
You must check to see that 1. there is indeed 12 volts going to each positive terminal, 2. the points are not corroded or dicked-up and will carry current., 3. The gaps are set to .020, and 4. the grounds are fully functional. be certain that the ignition switch has 12 volts on the "I" terminal with the key in on or start position. Also be certain that the red wire is delivering 12 volts to the ignition switch. Be certain there is a ground wire between the points carrier plate and the block. Never mind! I misread your post. You have magneto ignition. Points are still set to .020 There are two brown wires coming out from the carrier plate. these are the stop wires and should be connected to the blue and white terminals. At the switch they should be connected to the two "M" terminals. The magnets in the flywheel pass the iron core laminations and induce a current into the magneto coils.After the magnets pass the laminations, the induced current stops, the magnetic field collapses and that high voltage pulse generated goes to the plugs.