Installing a ceiling fan in a house built pre 50's
First order of business: install an old work ceiling fan box!

(The linked box is the first one that turned up on Google -- there are several makes and models of old work ceiling fan boxes available, all of the basic design depicted.)

Right now, not only are you violating NEC section 300.15,


  Boxes, Conduit Bodies, or Fittings - Where Required. A box shall be
  installed at each outlet and switch point for concealed knob-and-tube wiring.
  
  Fittings and connectors shall be used only with the specific wiring methods 
  for which they are designed and listed.
  
  Where the wiring method is conduit, tubing, Type AC cable, Type MC cable, Type 
  MI cable, nonmetallic-sheathed cable, or other cables, a box or conduit body 
  shall be installed at each conductor splice point, outlet point, switch point, 
  junction point, termination point, or pull point, unless otherwise permitted 
  in 300.15(A) through (L).


including the exceptions in (B), 


  Equipment. An integral junction box or wiring compartment as part of 
  approved equipment shall be permitted in lieu of a box.


(E),


  Integral Enclosure. A wiring device with integral enclosure identified for 
  the use, having brackets that securely fasten the device to walls or ceilings 
  of conventional on-site frame construction, for use with nonmetallic-sheathed
  cable, shall be permitted in lieu of a box or conduit body.


and (H),


  Insulated Devices. As permitted in 334.40(B), a box or conduit body shall 
  not be required for insulated devices supplied by nonmetallic-sheathed cable.


you have created a very nice falling ceiling fan trap!  Ceiling fans are heavy and require solid anchorage to two ceiling joists, or at least the solid-enough anchorage provided by a properly installed ceiling fan box.  Furthermore, without a box, an overheating or arcing splice can proceed to directly light your ceiling on fire!

Once you rectify the lack of a suitable box to mount the fan to, you can then wire black&amp;blue to black, white to white, and leave the bare (or green) wire from the fan unhooked (or terminated to the green screw in the box if you're uncomfortable leaving a wire end floating -- it makes no difference electrically in your case, but may be preferable for mechanical reasons).