Hi Izzy, Guys,
OK Izzy, do it the hard way !
Use some 600-800 grit emery paper on a good flat surface, like a piece of plate glass. Stick the emery paper down with double sided tape at the top and bottom edges. Use oil to act as a lubricant between the work and emery paper. All the oil is intended to do is to stop the emery paper surface from clogging up. The oil will contain most if not all the material removed. You must clean the caps/bearings thoroughly before testing. The thing you don't want is transferring abrasive particles to the lathe spindle.
Rub the bearing cap on the emery paper, wipe it clean test with the bearing in place, and do it again, until you have a fit that you are happy with.
Do the front cap and bearing first. Leave the rear cap off until you have done the front one.
Then leave the front cap off until you have set the rear one.
At this point you will have a known set of shims for both front and back bearings. Now you can start to set the spindle clearances as you want them.
Either adding shims or rubbing off material from the caps.
The headstock is the part you are working on ! The saddle is the part that moves up and down the lathe bed.