To work properly the regulator case has to be grounded.
Some regulators such as your old one have a GRD lug for a ground wire. Regulators without a GRD lug get their ground through being bolted to the metal chasis which is grounded.
Some regulators Have an "L" lug which stands for Load. It is used for such things as accessories or lights. In other words, it is hot with 12 volts.
If your white/black wire has ground at it's other end, and you have connected it to the "L" lug, you have absolutely connected a direct short from one of the regulators battery ouputs to ground.
So yes the wire will smoke.
Remove it from the "L" lug and attach it to one of the regulator mounting bolts, and if you haven't fried the regulator you should be OK.
By the way, the wire on "GEN' is blue but they fade with age and may look green.
Link to wire diagram....
https://www.onlycubcadets.net/forum/showthread.php?t=35