OK, I think I know what's going on here...
Yet another case of one manufacturer not wanting to put another maker's name on their guns...
My guess is that the ".32 Special" was actually the .32 S&W Long, only Iver Johnson refused to call it that.
It looks like only the third model Safety Automatic Hammerless was so designated.
I just found a post by Bill Goforth (he wrote a book on Iver Johnson:
http://www.gunshowbooks.com/cgi-bin/webc.exe/st_prod.html?p_prodid=GS37205&sid=9X4vr2zN) that indicates that the gun, while called a .32 Special, was chambered for .32 S&W Long.
"I thought the original name of the .32-20 was .32 W.C.F."
It was.
Oddly enough, your Grandfather may well have known about one instance in which quite a few people were bitten by inconsistent cartridge naming conventions that cause a lot of embarassment and confusion... And that might well have caused him to consider that having at least relatively consistent cartidge names is a good thing...
When Remington brought out their Model 8 semi-auto in the early 1900s, they introduced three new VERY similar rimless cartridges designed to compete with Winchester's rimmed rounds.
Remington wanted people to know that their cartridges were as good as Winchester's, but they took it one step too far...
Early Model 8s were stamped ".30-30 Remington"
That's right, even as early as 1908 the .30 WCF was well known as the .30-30.
Imagine all the confused people who walked into a gun store and said "Gimmie a box of .30-30 Remington" and found that the ammo wouldn't fit their rifle because they had actually purchased a box of .30 WCF manufactured by Remington.
I'm not sure, but this may also have been the case with early .25 Remington autos, as well.
Remington was forced to change the cartridge designation on the rifle around 1911.
A few weeks ago I was in my gunshop picking up my new Colt .32-20 Police Positive Special when one of those Remington Model 8s came in. It was the first one I had ever seen chambered in .30-30 Remington (.30 Remington rimless).
Even better, the guy working the counter thought it was chambered for .30-30 Winchester because of the marking.