Johannes Daniel Kestner founded his business about 1816 and advertisements for his papier mache dolls with leather bodies date to 1823. He is credited as being the founder of the doll manufacturing trade in the town of Waltershausen, which expanded to become the doll manufacturing centre for all of Europe, with numerous manufacturers based there. Unlike many of the manufacturers, Kestner was able to produce both heads and bodies. Other manufacturers brought their heads in, as they did not have the plant, such as a porcelain manufactury, to be able to make them in-house. In the 1850s Kestner was making china-head and wax-over-papier mache dolls but these were unmarked. Kestner died a wealthy man in 1858 and his two wives carried on the business, purchasing a porcelain factory that produced parian heads and later, bisque heads. In 1872 Kestner's grandson Adolph took over the business until he died in 1918. The company continued operating through World War I and into the Great Depression. However the decline in demand, especially from the United States resulted in the company going into bankruptcy in 1936.
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