Green’s Dictionary of Slang

1. (US, also chin curtains) in pl., a beard.

1908		B. Fisher A. Mutt in Blackbeard Compilation (1977) 71: General delivery swimming with one hand in order to keep the moisture off his chin curtains with the other. [Ibid.] 92: Has perfect crop of vice presidential lace curtains on chin.
1909		Van Loan ‘The Cast-Off’ in Big League (2004) 49: Jaggs would [..] entangle his iron fingers in the rustic’s beard [...] Sometimes the pitcher lost his grip. Sometimes the yokel lost his lace curtains.
1917		Van Loan ‘Levelling with Elisha’ in Old Man Curry 28: Well, old-timer, you out airing your lace curtains a little?
1931		Irwin Amer. Tramp and Und. Sl. Lace Curtains. – Whiskers, especially when full and verdant.
1934		(con. 1920s) J.T. Farrell Young Manhood in Studs Lonigan (1936) 178: Studs looked at the beard, lace curtains that must be dirty as a doormat.

2. (gay) a (long) foreskin.

1941		G. Legman ‘Lang. of Homosexuality’ Appendix VII in Henry Sex Variants.
1964		Lavender Lex. n.p.: lace curtains:-Foreskin of the uncircumcised penis.
1970		J.P. Stanley ‘Homosexual Sl.’ in AS XLV:1/2 57: lace curtains n Genitalia of an uncircumcised male.
1999		Gaymart.com Queer Sl. in the Gay 90s 🌐 Lace Curtains – Refers to the foreskin.