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I'm not sure that I can explain this very easily but here goes. The rear wheel spindle goes through a round block of metal that is clamped in a boss at the end of the swinging arm. The hole in the block that the spindle goes through is eccentric. You loosen the clamp holding the block and rotate it which has the effect of moving the rear wheel backwards or forwards relative to the gearbox sprocket. Hope that helps! If you look at the end of the swinging arm it should be fairly obvious.
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