If the last digit of the serial number is a letter o then that's a mid '60s machine. That is a vent like proshadetree mentioned and there should be a hose running down the lift cylinder like you guessed connecting the 2 fittings. It runs back to the top of the hydraulic tank. It vents the air from the cylinder as it raises, but once the seals in the cylinder start to leak by, oil starts to come out of that vent and should be directed back to the tank.