"I am repowering my Bristol 35.5 with a Yanmar model 3YM30 diesel engine, but I also want to increase my electrical capacity. Currently I have two 12-volt batteries with a standard three-way battery switch (Bat. 1, Bat. 2, and Both). I would like to add two more 12-volt batteries and align them like the two-bank configuration you describe on page 161 in your Cruising Handbook. My question is, will I still be able to charge the new system with the alternator/regulator in the three modes provided by the battery switch that comes with the engine?"
Yes, you will be able to charge the batteries one bank at a time—with the switch in the Bat. 1 or Bat. 2 position—or can charge both at the same time with the switch in the “Both” position. I suspect the switch you now have is a “make-before-it-breaks” type and, theoretically anyway, that allows you to switch between banks while charging. I don’t recommend this, however, because sometimes it produces a momentary open circuit at the alternator and could possibly destroy the alternator’s diodes. Always decide what batteries you want to charge before cranking the engine. Put the switch in the appropriate position and don’t touch it again until after you shut down the engine.
Another important point: It’s never a good idea to mix batteries of different types or ages. Rather than adding new batteries now, I’d wait until your existing batteries need to be replaced. That’s the best time to create a larger house bank than what you now have. Typically, you will use the house bank for everything—both for cranking the engine and servicing house loads—and will keep the other one as an emergency cranking battery.