Voltage drops when turn on electric fan

Let me answer some questions. Yes it is an internal volt regulator, I also have a ground strap from chassis to the block and the voltage stays low even at higher RPM. One thing I forgot to mention and I am sure it is important. the last time I drove it I had the fan on low speed and when I got back the fan motor was smoking. After it cooled I had to literally manually turn the fan blades to get the motor to turn. It still turns on ok now but does not spin freely with a flick of a finger. The motor gets hot in low speed and cools down in high. Do you think the motor drag could be causing the volt drop. Sorry for the lack of info. Not much wire involved, just from starter up to switches and out to fan.
I'd be more inclined to think that there is too low a voltage to the fan motor in prevent excess current draw. Sounds like the wiring to it has some bad connections, or the low speed dropping resistor is wrong or addled.

If the alternator is not putting out more than 12v at 1500 or 2000 RPM, then something is wrong with the alternator (like blown diodes) or the field wiring is messed up.

BTW, OP, when you say alternator voltage, are you measuring it right at the output stud on the alternator with a test voltmeter, or with a test voltmeter at the battery, or are you reading this on a dash gauge? The answer to this is important to be able to figure out what is going on.