I have always just set them in the center position, and forget about it. I think it was supposed to produce more carb heat, in the winter. Dan has a good feeling for them. Some of the other early vehicles, like the Internationals, in line sixes, had the flapper on a heat sensitive spring, so as the engine warmed, it would open the flapper. Not sure if they had a measurable effect on the engine, either way. The gas consumption of the M37 was always bad to worse, 4 to 5 mpgs. But its my idea of a "four wheeler", and I still use it daily on the ranch. The neighbor Kids are impressed!
To answer the question, having the flapper deflect the exhaust upwards toward the intake manifold is the winter position. I don't remember which way that is, without seeing it.
Lee in Alaska