Our house was built in 1940 and they used rock-lathe (it looks like 4'x4' squares of sheetrock with a very porous finish), and then two layers of plaster (brown coat and finish coat) on top. To smooth out the top of the final plaster layer they put on what appears to be a solid white paper-like finish. In most cases they put patterned wall paper as the final finish.

Bruce

I had a house built around, well, nobody knows exactly. 40sish in east Texas. It had plank walls and ceilings. Someone had put drywall over some of it. The rest was finished by wallpaper--mesh stuff tacked to the wood covered with wallpaper. An unimaginable amount of cockroach droppings filled the void. Worst wallpaper to strip EVER.

In the 40's exterior wall sheathing was often made of brown compressed wood fiber with an original trademark of "Beaver Board. It sometimes had an asphalt coating on the exterior when used behind brick and it was sometimes used in the interior as well and covered with wallpaper.

Today it is primarily used as an underlayment for fully adhered single ply roofing membranes and called "recovery board".