Hi Guys, I just picked up a new air compressor for the shop, it's an old Kellogg American with a model 321 pump and a peerless 1.5hp motor. A little bit of work and everything is working great! Total cost was only $125.00! 
The tank drain has me a bit confused, it is on the side of the tank (see second image). I always thought that the drain had to be on the bottom of the tank to let the water settle down with gravity. This appears to be original as it has the original blue paint on it.There is a threaded hole on the bottom of the tank where I would have expected the drain to be, but it's plugged and has the original blue paint on it as well. Is there a tube that goes to the bottom of the tank inside or something?
The tank drain has me a bit confused, it is on the side of the tank (see second image). I always thought that the drain had to be on the bottom of the tank to let the water settle down with gravity. This appears to be original as it has the original blue paint on it.There is a threaded hole on the bottom of the tank where I would have expected the drain to be, but it's plugged and has the original blue paint on it as well. Is there a tube that goes to the bottom of the tank inside or something?

I guess in theory it could work as a pressurized drain if it had a dip tube, but that wouldn't instill much confidence in me. 