Yes, this is what the stencil setting is for. It disables the ribbon so it is not in the way when you type onto the special waxy paper. The key slugs then smash the wax off the paper leaving an impression of the characters. When you have typed the whole document, you mount the paper in a mimeograph (or similar--there were several slightly different technologies) machine and when you run the machine the printing fluid goes through where the characters had been typed and onto the final paper. Many of these machines were hand-cranked, unless your company or school district was rich and could buy a motorized one. Anyway the process was pretty quick.

Yep, they had copy machines way back then. And don't forget that photography and the printing press are basically copy machines, too, and have been around for almost 200 and 500 years respectively.

Please don't take offense, but I am genuinely interested--how old are you?
(OK. Fair is fair. I'm 70.)

 

And oh, that mimeograph fluid! It had the most unique smell. Teachers would pass out some stuff that was freshly mimeographed, and all the kids would be sniffing the paper. If I could smell that smell again, it would completely take me back to childhood (I'm 50). 

What did it smell like -- that's a good question. I'm' not sure how best to describe it. It had a sweet chemical smell; I'm trying to think of something to compare it with. You know what bubble gum smells like? It didn't exactly smell that way, but that's sort of in the ballpark -- candy-ish, without really smelling like candy. Or maybe fruit juice is a better comparison -- think of suddenly coming across a weird flavor of Kool-Aid that you never knew existed, with its own unique smell. 

I am 47 but went to Catholic Schools. The small schools were late adapters when it came to tech. Nearly every test or worksheet I ever did was purple. I would like to have one of these things now.
 

I'm 38 and I remember the memeograph smell from my very early years of primary school. I remember a purple copied text and a metho smell.