Here's am explanation from Slantsixdan explaining the system, how it works and the history.
" PCV became mandatory in California for '61, in New York for '62, and was standard equipment in all states + Canada for '63.
The purpose of the crankcase ventilation system (of whatever type) is to take vapours and fumes out of the crankcase, so there has to be an air inlet; it’s called the crankcase breather. Air flows in through the breather, sweeps crankcase fumes and vapours along with it, and out via one method or another. The out-via method is what began to change in California in 1961.
What was mandated on new ’61 cars in California (and ’62 in New York, and became standard equipment on more or less all vehicles for ’63) was positive crankcase ventilation: crankcase gases had to be ducted into the intake tract rather than dumped out into the atmosphere via a road draft tube. It was not a closed system, because the crankcase breather was still vented to atmosphere. But it was widely, sometimes even officially, and erroneously called “closed crankcase ventilation” at the time.
With an open-to-atmosphere breather, under zero-vacuum conditions (wide open throttle, e.g. up a long hill) and/or on an engine with high blowby volume, the crankcase gases flow right back out through the breather, i.e., the system reverts to a basic direct-vent mode. This causes objectionable odours in the passenger compartment, and releases unburnt hydrocarbons into the atmosphere, where they create photochemical smog.
So, starting in 1964 in California and 1968 nationwide, the (truly) closed positive crankcase ventilation system was introduced. On this system, the breather is ducted via a hose to the air cleaner. Most of the time, this is just exactly the same as venting to the atmosphere: air flows into the crankcase through the breather (which contains mesh to keep the spiders out of the crankcase), and out via the PCV valve. But under those low/no vacuum and high-blowby conditions when an open system just vents off into the atmosphere, there’s still suction above the throttle plate due to the influx of air through the air cleaner and into the carb, so the crankcase gases are still drawn off out of the crankcase and consumed in the engine.
The closed system constitutes an improvement, but in extreme conditions, high volume crankcase gasflow out of the breather can oil down and ruin an air filter element. Heavy-duty vehicles sometimes had a foam or gauze wrapper around the dry air filter element to stave off filter wetdown (until the wrapper disintegrated or got thrown out and not replaced). Obviously not a problem with oil bath air cleaners. "
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