Used motor oil may be a step up from what was there and save a few pennies but I think I would rather "use the same oil as is in the crankcase" as is recommended. If I wanted to save a few pennies I would buy the cheapest quart of house brand 30wt (nondetergent even) I could find and use fresh clean oil. Watch for sales and buy a couple quarts, it ain't gonna go bad.
I realized the air cleaner doesn't work the way I thought it did after reading about it in the H manual. I had been told/read somewhere that when the air traveled down into the air cleaner and made the sharp turn to head back up that the dirt riding along couldn't make the sharp turn and landed in the oil where it was trapped. Not even close by the way the manual describes it. For what it's worth from the Farmall H manual:
Air Cleaning System
Clean air for combustion is asssured by a three-stage oil-type air cleaner. A heavy screen in the air intake cap prevents large particles from entering the air cleaner. The air then passes to the oil cup where it goes through a bath of oil. As the air rises to the intake manifold, it passes through a series of oil bathed screens and the fine dust is removed. As the oil from the screens works back down, it carries the dirt with it and settles in the oil cup. The oil cup must be cleaned and refilled regularly with new oil.
Oil Cup Service
Remove, clean and refill the oil cup every day, or after every ten hours of operation (more frequently when operating under dusty conditions). Refill the oil cup to oil level bead with the same grade of oil used in the engine crankcase. The capacity of the oil cup is 1-5/8 U.S. pints.
Do not remove the oil cup while the engine is operating.
Before replacing the oil cup, clean or wipe oil or grit from top bead of oil cup, oil cup retaining clamp, and the surface under the clamp.