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It isn't entirely certain when Thoreau said this or what he meant, but it is rumored to be something he said when Harvard offered him a degree as part of their policy to offer all graduates of the university an unearned Masters degree five years post graduation. Thoreau thought this was patently ridiculous and refused the degree and said this under his breath suggesting that they keep all the sheep skins on the sheep instead of making them into falsely awarded degrees.
Thoreau felt strongly that education was something that had to be pursued and worked for and not necessarily something that could be conferred by a University or any organization so the idea of getting a degree he didn't work for was distasteful.
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