The engine is a Kirby-Lauson 2 stroke, which is moderately unusual, and it seems to be in remarkably good condition for a 40 year old engine. It is a K7, K9 or K11 - the other versions did not have a primer bulb. It appears to have K11 stamped on it.
Here is a view of the carburetor, governor and adjustments, from the Gregory's manual:
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As you can see it has a simple vane-type governor, generally similar to most Briggs and Stratton 4 strokes. I suggest you begin by checking the vane governor mechanism to see that it moves freely, and the spring stretches when you set it to high speed, and relaxes when you set it to low speed. The vane should be close to the flywheel (about 4 mm clearance) on maximum speed when the engine is not running.

Note that the spring-loaded button on the bottom of the float bowl is just a water drain.

That is about all I can offer without more information. The engine is not intended to run below 1,600 rpm, but the speed should vary over a reasonable range when you move the speed control lever. If it is biased toward high speed it is possible the linkage is bent, maladjusted or jammed, or the air vane itself has problems. You should take a look at the governor spring, but since the spring makes it go fast and the vane mechanism makes it go slowly, the spring is probably not the problem. We need more information and some close-ups of various parts of the mechanism.