As above, are you sure you want to risk damaging or ruining a 73 year old antique collectible holster?
WWII collectors are paying good money for these Model 1916 Dismounted holsters, but not those damaged or screwed up.
The numbers of originals in good condition is shrinking and values are going up.
It's probably best to use an original as a display without the gun in it.
If you insist......
First move is to throughly inspect the leather and stitching for age damage, rotted stitching cord, dried out leather about to crack, etc.
Check to see if the leather is still pliable and can be easily flexed without any cracking or breaking.
Check the wire belt hanger for signs the leather around it is cracking or tearing.
If it looks okay, forget the water tricks, that's not a good way to treat an antique.
Either it's usable as-is, or don't do it.
Note that the 1916 holsters were made for USGI Model 1911 and 1911-A1 pistols with the tiny GI sights.
If your pistol has the more modern, larger/higher front sight you'll likely damage the holster trying to force it in.
To stretch the leather, wrap the gun in a couple of sheets of plastic wrap or put it in a plastic bag.
GENTLY push and twist the gun to get it to seat fully in the holster.
If you see or hear or feel any cracking or weird sounds...STOP.
Once you have the gun seated in the holster just set it in a cool dry place and let stand 24 hours.
Remove the plastic and check the fit.
If it's still too tight put the gun in two bags and gently force it in the holster and let stand another 24 hours.
If it's still too tight, don't add more bags, just let stand longer.
Eventually this will stretch the leather without using any water, oils, dressings, etc.
Once the gun is a snug, but not too tight fit, add a THIN coat of a good leather treatment like Pecard's or Lexol Leather Conditioner.
You'll have more luck finding Lexol in most shoe shops or Western saddle stores. You can also order it from Tandy Leather.
Again, apply a LIGHT coat, and use a treatment that won't darken leather.
DON'T use any oils like Neatsfoot oil, mink oil, Snow Seal, etc.
Lexol Leather Conditioner will recondition the leather and prevent cracking and won't permanently darken the leather.
After the gun fits and the leather treatment has had a few days to settle, apply a coat of Johnson's Paste Wax or neutral shoe wax and buff with a soft, clean cloth.
USE NO OILS or other treatments.
Last, if you intend to actually use this holster, that's almost certainly not a good idea. Even if in good condition the leather and stitching is almost certainly not up to actual use.
A smarter move it to buy a good replica.
The absolute finest replica available is made by El Paso Saddlery. They sell both the Model 1912 Mounted holster, and the Model 1916 Dismounted holster.
They sell their Model 1916 replica as their "Model 1940".
This is as good or better then an original USGI holster made in the 1930's when the best GI holsters were made.
If the price is too high, you can buy an acceptable replica made in China from Pacific Canvas & Leather.
They sell fairly close, reasonably good quality replicas of the Model 1912 Mounted, Model 1912 Dismounted, and Model 1916 Dismounted holsters.
These are not up to USGI standards and no where near El Paso's replica but are good using holsters.
http://www.epsaddlery.com/
http://pacificcanvasandleather.com/index.html
(Their web site is down right now)
