I have some old Varney F3s also. Maybe I can help.These units have only a two wheel pickup on each engine. One truck is connected to one side of the motor and the other truck to the other brush. You need to be sure that each truck has the insulated side of each wheel on the same side and that the insulated wheels of the other truck are on the other side.
It sounds like you may have all the insulated wheels on the same side on both trucks. If you had the insulated sides opposite each other it would generate a short. The other thing to check is that the trucks are insulated from the frame. I'm working from memory but if these things don't work I'll dig the units out and try to guide you.
If you have not done so, lubricate the motor bearings and the gears before operating. They are probabley dry by now if you haven't lubed them.
Doug