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It's referred to as a "bypass". It's there on many original pumps, depending on engine size and horsepower. Some pumps don't have it, some do. It supposedly gets the water moving "faster" through the engine/intake before the thermostat opens.
Original pumps use a bypass "nipple" which are, I believe 3/4 inch thread. Replacement pumps with the bypass have about a 1 inch opening in the pump body itself, and require a reducer bushing to use the smaller "nipple". Not much help, I know. Check the AIM for your year car and your specific horsepower rating to see if your particular "model" used the bypass. Chuck
Smallblock pumps will have either an internal or external bypass depending on the engine application. The purpose of the bypass is to allow coolant circulation with the thermostat closed. This helps ensure even temperature rise throughout the engine while it is warming up. It also gives you a slight margin in case of thermostat failure. If the thermostat fails, the water continues to circulate in the block and rather than go into immediate melt-down, just starts getting hot and is supposed to give you enough opportunity to get the car to the side of the road.
Most smallblocks have an internal bypass with a small hole in the pump's passenger side face. This small hole mates to another small hole in the block just below the big water pump hole. Some have the external bypass where a hose exits from the top of the pump and meets another hose fitting on the intake manifolds water outlet manifold.