The lever toward the front of the tractor is to switch between the 2 speeds that are driven by the transmission input shaft and the PTO speed on these only vary based on engine rpms. It should have 3 positions. One is for 540 rpm, middle is "off" the last is for 1000 rpm.
The lever toward the rear is for the "ground speed" PTO mode, which is driven off the output shaft of the transmission and therefore varies its speed based on how fast the rear wheels are turning.
The 540/1000 rpm mode and the ground speed mode are setup so that you should not be able to engage one while the other is already engaged. In order to be able to engage the ground speed, you must put the other lever in the middle, or "off" position. Likewise, in order to move the forward lever out of the "off" position to either the 540 or 1000 position you must first put the ground speed lever into the "disengaged" position.
These levers configure what is going to drive the PTO, and sets up the gearing going into the PTO clutch. The handle on the dash is what controls the engaging and disengaging of the PTO clutch itself. As Larry said, pushing the handle on the dash all the way in disengages the PTO clutch, and pulling it out engages it.
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