Back in the day, we all heard that story. Whether it actually happened, of course, is another matter entirely.
If W. Schnell is to be believed (as he claims in 30 Years a Watchtower Slave) this thing they had about beards was all just a power trip. Many had taken to imitating CT Russell by wearing a “goatee” type beard. After Russell’s death Boozerford Rutherford forbade beards, just to remind the rank-and-file that he was now running the show.