The wedge and bolt of the stem seem a bit rusty. Squirt a bit of oil or grease over the threads of the long bolt and clean off the rust from the wedge.
The stem which fits inside the steerer tube of the frame should have a mark for max extension.
You set height of theb stem then tighten the wedge bolt a little. This should hold the stem in place and permit you to rotate to line the handlebars with the wheel direction. Once they are aligned, tighten a bit more. You should not be able to rotate the bars relative to the wheel, using hand strength.
I also note that you have a straddle wire on your brakes. If the main brake cable snaps, this straddle wire will fall onto the tyre and cause an instant stop. This can be quite dangerous. Fit something for the straddle wire to fall onto, either a mudguard or a front reflector mount.
All of these bits are safety critical, so make sure they are done right.