Dear Mr. Morrey,  The brake pad you mention should be functional,
during play only.  The thick wire lever holding the pad is not really
connected to the reroll lever in any permanent way.  It is just
arranged so that when the piano is in reroll, it is moved slightly
away from the wheel, to release the brake for rewind.  During play,
the brake pad is allowed to freely press the brake pad onto the wheel,
by means of a spring.

This spring is what appears to be missing or out of adjustment on your
instrument.  They are often removed or bent back, in an attempt to make
the roll move easier, but they should be in place.  If the piano is
properly rebuilt, the roll motor is strong enough to move the roll with
the playing brake "on", and the brake is needed to hold the paper
tight.

There were at least two ways that this was done (knowing Aeolian, there
might have been more).  On earlier models, the brake lever was long,
and pushed into the brake mode by a leaf spring at the bottom.  On
later models, a coil spring pulled the brake lever into the brake
position.  In either case, the far end of the brake lever was
positioned so that when in reroll, the reroll lever relieved the brake
pressure by moving the brake lever against the spring, away from the
wheel.

The picture shows this more clearly.  It is not to scale, but shows the
principle.  You need to find or replace the spring, or adjust it so
that it creates the brake pressure.

Best regards,

Richard Vance

 [ See the drawing at http://mmd.foxtail.com/Tech/  -- Robbie