Tom, the second tank is ok as long as you realize that if it takes twice as long for the initial fill, it will let you use air for twice as long before the compressor kicks in again, and then the motor will have to run twice as long again to bring it back up. If you continue to use air at a heavy rate during this time, like when you are spray painting, eventually you run out of air and motor.
When I was doing a search on your initial question, I did find the name of a guy that said he could buy or make parts. I believe that I was at yahoo.com, the search was for "Sanborn Manufacturing" and the site was a forum/board like this one called "theoak" or something like that. May have had "air compressor" in the search term also. I believe that you should replace the motor, compressor, tank, and switch and wiring package and let this old honey do things that are age appropriate. You want to run your '31, and should, but you don't want to spend a couple of days pulling stumps with it either. You would not drive across the country in your '31 without going over and replacing everything that was questionable in your '31, why do this. Pick your spots when you do use it, and it will be a joy forever though.
If the "outside" compressor is stationary, you don't need the filter and trap outside with it. Having them in the shop lets you see what's going on. You will have condensation in the tank, though and you will have to drain this during freezing weather or obviously you will have problems. If you make "drain the compressor" then "turn off the lights" the last 2 items of your daily shop ritual, you will be golden.