Variable power supply
The LM317 will give out 1.25 V when ADJ is connected to GND. Since you have this voltage that implies that somehow you have a permanent GND connection to ADJ. 

Simon B may be on the right track. Both the green and white wires, which seem to be involved with the pot, are connected to negative. Check that you haven't connected the white wire to the black instead of the pot wiper. (If you disconnect the black wire from the pot the voltage out should increase.)