I think in the Finish Mystery Rutherford (actually Franz) still wrote the Great Crowd was in heaven. So when and what books did the switch take place and the Great Crowd become on earth???
When and what book did the Great Crowd go from heaven to earth.
The official announcement of this change in doctrine came at the Watchtower convention in Washington DC, May 30 to June 3, 1935.
During Rutherford's "Great Multitude" talk before 20,000 attendees, he asked those of the "Jehonadab class" (the secondary earthly class) to stand. Then he made his dramatic announcement (because he loved drama) ... "Behold! The Great Multitude!"
Before this speech, they had started teaching about an earthly class (because the 144,000 number of their heavenly class was obviously getting to be too small for the number of JW's who were coming in). So in this talk, JF Rutherford identified the earthly class and the great multitude as being the same.
The WTS later changed the name of the "great multitude" to the "great crowd". Here's the Watchtower's spin on those events: http://wol.jw.org/en/wol/d/r1/lp-e/2001363
It is commonly stated that Rutherford closed the heavenly calling in 1935, as heaven was running out of room. This is only partially correct. With the number of Jehovah's Witnesses increasing, Rutherford had to claim the calling for the 144,000 ruling class was near completion. However, since the Great Crowd (or Great Multitude) was also said to be heavenly, an unlimited number of Jehovah's Witnesses could still go to heaven as part of the Great Crowd in heaven.
Rutherford had been preaching that the "other sheep" were the "millions now living who will never die"; people not associated with the organisation that were still worthy of salvation into the paradise earth.
“Sheep represent all the peoples of the nations, not spirit-begotten but disposed toward righteousness, who mentally acknowledge Jesus Christ as the Lord and who are looking for and hoping for a better time under his reign.” Watch Tower 1923 Oct 15 p.309
These righteous ones of the nations were the sheep that were to live on earth.
“Jehonadab represented or foreshadowed that class of people now on the earth [who] are out of harmony with Satan’s organization, who take their stand on the side of righteousness, and are the ones whom the Lord will preserve during the time of Armageddon, take them through that trouble, and give them everlasting life on the earth. These constitute the ‘sheep’ class." Vindication (1931)
It was not until 1934 that it started to be proclaimed that to live on earth baptism into the organisation was necessary.
"In 1934, The Watchtower made it clear that Christians with an earthly hope should make a dedication to Jehovah and be baptized." Watchtower 2001 May 15 pp.14-15
This led up to the new teaching in 1935 that the Great Crowd and the Other Sheep were actually the same class, and as such, the Great Crowd were on earth, not heaven.
"In a stirring talk on “The Great Multitude,” delivered to about 20,000 conventioners, J. F. Rutherford presented Scriptural proof that the modern-day “other sheep” are identical with that “great crowd” of Revelation 7:9." Watchtower 2001 May 15 pp.14-15
It appears that moving the Great Crowd to earth was to support Rutherford's concept of narrow salvation. The most effective way to rapidly grow Watchtower followers was making survival at Armageddon contingent on being one of Jehovah's Witnesses. With anointed Jehovah's Witnesses going to heaven and a Great Crowd of Jehovah's Witnesses being Armageddon's earthly survivors, the only option for worldly people became eternal destruction. This concept worked; between 1935 and 1975 the Watchtower Society was one of the fastest growing religions on earth.
The heavens closed its doors in 1935 to the WT followers because of their errant, ungodly false etchings. Makes sense WT followers felt no heavenly hope after 1935, the teachings were outlandish and as the WT leader, Rutherford was viewed as an arrogant asshole and any who followed him were rejected from entering the heavenly realm. Rutherford had to deal with this sudden lost hope of the WT masses and invent a two class hope so faithful followers wouldn't leave him and go elsewhere. Now the world can see from clear hindsight Rutherfords teachings and beliefs have all been abandoned by the WT because they weren't true then and embarrassing for the WT to have in its history now. But now they are diverting and changing with a blinding pace all their false doctrines.