Select the System icon and double click on it, check the Device Manager Tab, and then open up the Drives folder. See if it lists both hard drives there. If not, then Windows 95 may not be seeing the hard drive. Perhaps you may have to disable 32 bit access, or turn on DOS compatibility mode or something.

More possible is that the other drive isn't compatible with the newer drive. Try setting the 1.2G up as a single drive and see if it boots up. Use a floppy disk to boot into Windows 95 Command Line or DOS Command Line mode and see if you can run FDISK and FORMAT on the drive. If you get an error message there, it very well could be the drive is bad.