Where did the term "mutt" come from in reference to a mixed breed dog?

Mutt was originally a shortened version of muttonhead and was basically a derogatory term.

Clipping not of sheep but of a word having to do with sheep has given us our term mutt for a mongrel dog. Clipping or abbreviating words, a standard process of word formation, sheared mutt from muttonhead, a pejorative term meaning "a stupid person" based on the notion that sheep are stupid. Mutt in its first recorded use in 1901 is used in the same senses as muttonhead, but it is soon recorded (1904) as a term of contempt for a horse and then (1906) for a dog.
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http://www.answers.com/topic/mutt