Excerpted from "Down to Earth Dogs, The Terriers" by Arthur Frederick Jones. Man's Best Friend--National Geographic Book of Dogs, Merle Severy, editor, 1971. p. 279.
Europe long regarded hunting with dogs as a sport of nobility. Reasoning that a shortened tail rendered a dog unsuitable for hunting (since a long tail should enable him to change direction quickly without falling flat on his muzzle), royalty decreed that owners of long-tailed dogs must pay an exorbitant tax. That's how most terriers wound up with docked tails. But owners soon discovered that such amputation did not prove the handicap expected. In fact, after digging down to a terrier in an underground passage, they found the sturdy, docked tail made a fine handle with which to yank the dog out into the open.