You need a tonewheel, or perhaps a device connected to the old speedo cable, that will provide square wave pulses to create the signal required by the ECU.
Without this, the ECU sets 3-1-1, and also won't do engine load sensing. Additionally, the fuel cutoff on throttle over-run feature is disabled, so the car will pop and bang on over-run, and will hunt for idle (which you're experiencing).
The LH 2.4 Greenbook provides a better and very thorough explanation of it all, but it's at home and I am not (at present).
Cleanflametrap's page on the LH 2.4 240 speedo (see link below) shows you what signals need to be generated - note the square wave he shows at pin 3 of the IC.
http://cleanflametrap.com/speedo.html
A 271 Hz signal into a 240 non-ABS speedo circuit gives a speedo reading of 5 MPH.
A 660 Hz signal into a 240 non-ABS speedo circuit gives a speedo reading of 60 MPH.