A century before Xavier Roberts started packing "adoption papers" with his Cabbage Patch kids, French dollmaker Pierre Francois Jumeau was fighting the competition with a merchandising gimmick of his own.

Rivalry between Jumeau and his German competitors was so fierce that Jumeau took to inserting little notes into his dolls' boxes. In his "Letter of a Jumeau Baby to her Little Mother" he lambasted the competition's "frightful German babies," helpfully pointing out such design flaws as their "stupid faces of waxed cardboard, their goggle eyes and their frail bodies stuffed with hemp threads."

And a merry Christmas to you, too, Pierre.

Today, doll collectors might heatedly debate which antique doll is the prettier or the more valuable, but according to doll expert Jan Foulke, the Jumeau is the most famous doll in the world, the one all serious antique doll collectors aspire to own.

According to an 1888 ad, a Jumeau doll with "extra long flowing hair, dressed in the latest Parisian costume of silk, satin and velvet, trimmed with laces, ribbons and with shoes, socks and hat to match," cost $8, then an enormous sum.

That same doll on today's antique market, in excellent condition and wearing the original clothing, would cost $4,500.

All of which goes a long way toward explaining the appeal of doll collecting, both as a hobby and an investment. Doll collecting is the third most popular American hobby (after stamps and coins), and each year is gaining more converts, according to Gary R. Ruddell, publisher of the magazine Doll Reader. The hobby of doll collecting -- which also includes new "collectibles" -- is also big business. Last year, according to the Toy Manufacturers of America, retail sales for new dolls totaled $1.8 billion.

Dolls have been a favorite plaything since the dawn of civilization -- there is evidence of dolls used as toys as far back as 2000 BC, and the Greek biographer Plutarch wrote of his 2-year old daughter playing with dolls. By the 18th century the making and distribution of dolls began to develop as an industry; by the 19th century, doll-making in France had evolved into an art form.

The golden age of doll-making is generally considered to be from about 1860 to 1900. And, oh, what beautiful dolls peeked out of Victorian Christmas stockings a century ago! Fine French bisque beauties called Be'be's were amazingly lifelike, with silky, human-hair wigs, large "flirty" glass eyes, hand-painted lashes and eyebrows, delicate pierced ears with tiny earrings, the faintest blush of color on their cheeks and briar rose lips.

Before this time dolls had resembled little women rather than children; French Be'be's -- which were idealized versions of small children -- revolutionized the concept of the doll.

"In 1885, the French Be'be' would have been the luxury doll," says Foulke, describing the one doll our great-grandmothers wished for, but only the wealthier children would see on Christmas morning. Foulke, an antique doll dealer and collector of French Be'be's, is the author of the doll devotees' bible, The 6th Blue Book: Dolls & Values (Hobby House Press, $12.95). "The French doll always had the connotation of being the best. It was always luxurious, it was the best made, and the most beautifully dressed. The French doll was also always expensive: it was expensive when it was new and it is expensive now for collectors."

By the turn of the century other toy manufacturers, particularly German dollmakers, began to compete for the lucrative American market, aiming for middle-class parents who desired the French Be'be' for their children but could not afford the French prices. The Germans offered them an alternative to the Be'be': the Liebling.

The German dolls, explains Foulke, were exact copies of the French, but were mass-produced and sold at lower, more affordable prices. In fact, the Germans' unmarked dolls were so successful at imitating the French bisque Be'be's that it was only after 1891, when the U.S. Congress passed a law requiring that imported merchandise be plainly marked with the country of origin, that the German versions could be easily identified.

Despite Jumeau's low opinion of his competitors' products, the German dollmakers flourished and eventually pushed the French completely out of the doll industry before World War I.

And while "the German dolls were always one rung underneath the French dolls," as Jan Foulke puts it, they are always in demand as antique collectibles. They are, she says, a good place for a novice interested in collecting antique dolls to begin.

In fact, says doll expert Helen Nolan, many of the dolls produced in the early 1900s, especially those made by Armand Marseille, Simon & Halbig, Handwerck, Heubach, Kammer and Reinhardt, can be stunning. "Better a beautiful Simon & Halbig than a Jumeau of poor quality at any price."

Nolan is president of The Magnificent Doll, a Massachusetts firm specializing in buying and selling antique dolls, and has written on the subject for Dolls Magazine. "Investment" is a word one frequently hears when one begins to explore the world of dolls and doll collecting.

Nolan compares buying dolls for investments to playing the stock market, and has constructed hypothetical doll investment portfolios for the readers of Dolls, using the Wall Street categories of High Risk, Moderate Risk and Low Risk.

Dolls, like anything else bought for investment, should be held for at least 10 years to fully appreciate, says Nolan, at which time they should double or triple in value. But, she stresses, "the point is to enjoy your collection while you're waiting for it to appreciate in value."

"I think people often rationalize the purchase of a doll by saying it's an investment," says Foulke, "because dolls cost a lot of money. I mean, you're spending $500 to $600 for just an average doll." But Foulke believes that doll buying, unlike playing the stock market, is an emotional rather than rational decision.

"There's a lot of heart involved in doll collecting. People say, 'How could you ever part with her?' But I just tell them I'm practical, I have to pay the rent."

As well, Foulke adds, the reasons many people -- particularly women -- embark on doll collecting as a hobby are often emotionally rooted. "The doll they buy might be the one they always wanted as a child but their parents could never afford, or is the one their brother broke."

"I think the doll industry has exploited the collector over the past four or five years," says Nancy Villasenor, a doll designer and president of Jesco Inc. Villasenor, 34, who created the Katie doll in 1984, believes that doll manufacturers artificially manipulate the market by producing new lines of "collectibles" each year.

"The hype that doll manufacturers produce -- 'our new collectible series, our limited edition, one year only,' this type of thing -- has created some consumer interest, but I don't know what the lasting value is. I think the reason something becomes collectible is because it touches someplace deep inside the person who buys it, either for themselves or a special child."

The doll industry, Villasenor believes, has lost sight of the fact that the antique dolls that are now the most desired of all collectibles were once created solely to be a child's playmate rather than an art object.

Like the fine French dollmakers of a century ago, Villasenor was inspired to try to recreate the look and personality of a real child when she designed Katie. Using her 4-year-old niece as her model and inspiration, she says she tried to "capture the joy and delight in her pose and impish smile, to be reflected back into the eyes and imagination of the little girl who would play with her."

Villasenor says her greatest wish is for Katie -- like the Victorian dollies -- to become a child's "forever friend," so that years from now what makes her doll valuable is that, once upon a time, perhaps on a Christmas morning, she was cuddled, and not just collected.