Typophillics no. 1
Erik Spiekermann and E.M. Ginger, authors of Stop Stealing Sheep and Find Out How Type Works (Mountain View, California: Adobe Press, 1993), explain the title of their book thusly:
In 1936, Frederic Goudy was in New York City to receive an award for excellence in type design. Upon accepting a certificate, he took one look at it and declared that, “Anyone who would letterspace black letter would steal sheep.” This was an uncomfortable moment for the man sitting in the audience who had hand lettered the award certificate. Mr. Goudy later apologized profusely, claiming that he said that about everything.
You might have noticed that our book cover reads “lower case,” while here it reads “black letter”—two very different things.…
We’re not sure how “black letter” got changed to “lower case,” but we’ve always known it to be the latter; whichever way, it makes infinite sense. 
With the publication of their book, Spiekerman and Ginger popularized Goudy’s phrase But exactly what Goudy was complaining about and exactly how he phrased his complaint has since been a matter of debate both in print and online.
The online Urban Dictionary says, “Anyone who would letterspace lower case would steal sheep.” Typography consultant Ilene Strizver concurs, listing the act as no. 8 on her list of “Top Ten Type Crimes.”* Talk:Design says that “lowercase” is a misquote, and that “blackletter” was the target of Goudy’s ire. Similarly, lawyer and typographer Matthew Butterick writes, “Typographer Frederic Goudy is famously credited with opining that ‘Anyone who would letterspace lowercase would steal sheep.’ But a few sources claim that his original comment concerned blackletter fonts, not lowercase, and that he used a more colorful verb than ‘steal.'”
The more colorful verb that Butterick refers to is “shag”, British slang for “fuck.” Wikipedia’s entry on letter-spacing says, “Wide letter-spacing, beyond relaxed book composition, can look affected and earned the opprobrium of Frederic Goudy: ‘Men who would letterspace blackletter would shag sheep.’ When quoted, ‘shag’ is often bowdlerised as ‘steal’.” This version is attributed to Spiekermann as part of Tiffany Wardle de Sousa’s “Famous Quotes from Type Designers” forum on Typophile.com (2 July 2005), but I cannot find Spiekermann saying that. Instead, Eric West says he prefers “shag” to “steal” but does not provide a source for it as the real term. More importantly, John Hudson rightly questions its authenticity as something that an American in 1936 would say.  I also find it hard to believe that Goudy would use such a coarse phrase—even an American euphemism for “shag”—if his comment was delivered, as Spiekermann and Ginger claim, at a public event.
Looking for the source of their story, I spoke to both Spiekermann and Ginger, but came up empty-handed. Spiekermann said he got the story from Ginger who said that she got it from “a woman that was present at the event in New York City.” But, despite the many events celebrating Goudy’s life and work, none seem to have taken place in New York City in 1936.  There was a birthday tribute (his 70th) to Goudy in New York in 1935 and in 1937 he received the Medal of Honor from the Ulster-Irish Society of New York. The closest event in 1936 occurred in Syracuse, in upstate New York. Worldcat.org lists Dinner in Honor of Mr. Frederic W. Goudy by the New York Press Association and Syracuse University held in Syracuse 1936. [Oddly there is no copy listed at Syracuse University even though they were co-sponsors of the event. The only copy is apparently at Central Connecticut State University.] As part of the event, Goudy gave a talk, “Types of the Past; Type Revival.” It was printed, using his Bertham type, by Syracuse University. 
The image at the top of this post is the closest thing I have found as contemporaneous documentation of Goudy’s quotation. Arthur W. Rushmore (1883–1955), the long-time production manager at Harper & Brothers, Publishers, must have printed the card soon after Goudy made his comment, as his notation implies that it was not yet familiar. Was Rushmore present at the Syracuse dinner? If not, where did he come across the quotation. Presumably he printed more than the one copy that was sent to Paul Standard. Most likely he sent copies to all of the members of The Typophiles, which at that time would have been fewer than one hundred people. The scribbled date of “5/28/’38” is either the date that Goudy made his comment or, more likely, the date that Rushmore sent out the card.
If anyone has any documented evidence of Goudy’s quotation prior to 1938, please let me know.
Finally, what did Goudy really say? Spiekermann says he was complaining about letterspaced blackletter and that makes sense to me. Blackletter was—and still is—commonly used for American certificates and awards. As one of Goudy’s favorite lettering styles, he would have been especially sensitive to any incompetent rendering, especially loose letterspacing. Goudy’s own lettering and typographic aesthetic favored tight-spacing, following the examples of the incunabula printers and the influence of William Morris.
Although letterspacing blackletter may have been common practice in Germany, it would have struck an American like Goudy as hideous.  For an example, see the page (reproduced below) from Johann Winckelmanns Sämtliche Werke (1825) where the fraktur summary of the text has been letterspaced.
The shift in the quotation from “blackletter” to “lowercase” (or in some retellings “lowercase italic”) presumably came about because American typographers and printers, with little experience of setting blackletter for extensive text, did not fully understand the object of Goudy’s complaint. Traditionally, only capitals, when used on title pages or as running heads, were letterspaced. So, whether roman or italic, letterspaced lowercase would have immediately been seen as a mistake. Does this mean that Rushmore’s card—set notably in ATF Garamond Italic—already indicates Goudy’s comment was being revised? I don’t have an answer.
 Stop Stealing Sheep and Find Out How Type Works (Mountain View, California: Adobe Press, 1993), p. 7 sidenote.
 See the thread in “Famous Quotes from Type Designers” by Tiffany Wardle de Sousa on Typophile.com (2 July 2005). West ignorantly says, “Other than being theft of personal property, what is so disgusting about ‘stealing’ sheep anyway? So, if stealing sheep isn’t exactly looked upon as repulsive, the shagging makes a little more sense. But I’m no goudy [sic] expert.” When both England and the United States were more rural than they are now, sheep rustling, like cattle rustling, was a serious crime. It was a felony before 1832 in England, punishable by hanging. And in some states in America it was still a felony as late as 1908, though what the penalty was I don’t know. Sheep stealing has also been used as a model for general discussions of legal theory.
 I was unable to find any such event in Frederic Goudy by D.J.R. Bruckner (New York: Harry N. Abrams, 1990), The Story of Frederic W. Goudy by Peter Beilenson (Mount Vernon, New York: The Walpole Printing Office, 1939), Typologia: Studies in Type Design and Type Making by Frederic W. Goudy (Berkeley, California: University of California Press, 1940), or A Half-Century of Type Design and Typography: 1895–1945 by Frederic W. Goudy (New York: The Typophiles, 1946), 2 vols. Goudy’s comment does not appear in “Glorifer of the Alphabet,” the 1933 The New Yorker profile either by Milton MacKaye.
 Copies of Goudy’s text are listed at Scripps College, Ella Strong Denison Library, Frederic W. Goudy Collection, Subseries 1.2, Box 1, Folder 17 and at the University of Delaware, Frederic W. Goudy Collection, Series II, F6.
 German typographers routinely letterspaced blackletter because, other than a few schragschrift faces, there was no italic equivalent available when emphasis was needed within a text. British printers often used roman when they needed contrast with textura (see the 1611 King James Bible).
*I hate the concept of “type crimes.” See my Stereotype column, “Decriminalizing Typography,” in Print 70:2 (Summer 2016).