The electric gauge in these cars measures volts not temperature. It has an alloy of metal inside that changes resistance with heat. It is usually fairly accurate (no where near as accurate as a mechanical Mercury filled bulb is, but it is better than an idiot light).
However have you ever heard mention of grounding issues on these old cars? If you have a bad ground; say some one painted the head and got a plastic insulator called paint on the threads, or there are no grounding straps connecting the dash and the engine that should be attached to the firewall and the bell housing, or you have a bad terminal that is all corroded on your battery, don't expect anything to work correctly or consistently.