It's ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.

And now, a toy story. Since the early 19th century, a special kind of hospital in Portugal has performed surgery on children's beloved companions. We're talking about their dolls. Seamstresses and handymen fix broken limbs and mend torn clothes. It's the oldest known facility of its kind. The historic hospital does a swift trade at Christmas. And with Europe's poor economy, many gifts this year are recycled - something old, made new. From Lisbon, here's Lauren Frayer has the story.

LAUREN FRAYER, BYLINE: Up an old wooden staircase, in a row house off one of Lisbon's main cobblestone squares, Manuela Cutileira does triage on incoming patients.

MANUELA CUTILEIRA: (Foreign language spoken)

FRAYER: When a doll comes in, we first do a checkup, create a chart and assign a bed number, like you would in a regular hospital. Then we try to figure out what the treatment should be. If it's a simple procedure, we'll inform the family right away of the cost. And if it's something more complicated, they may have to leave the patient here overnight for more tests.

Cutileira runs Lisbon's Hospital de Bonecas, Doll Hospital, in Portuguese. Founded in 1830, it's been managed by her family ever since. There are lots of toy stores that sell new dolls but this facility lovingly repairs them.

CUTILEIRA: (Through translator) We accept all types of dolls. We can fix anything, from the oldest porcelain dolls to the newest Barbies and Kens. That's what makes our hospital unique. We even repair stuffed animals and toys with mechanisms that speak or dolls that cry.

FRAYER: And this little stuffed animal in a yellow raincoat needed some new wiring, Cutileira explains.

CUTILEIRA: (Through translator) He had lost his voice, so we had to operate and restore his vocal chords for him.


GENE KELLY: (Singing) I walk down the lane.

FRAYER: Next door, in the operating room, a woman in an orderly's smock performs a double-leg transplant. The walls here are lined with drawers filled with spare body parts from organ donor dolls: odd arms and legs, blinking glass eyes of assorted sizes and colors. Around the holidays, there's a swell of grandparents delivering their own tattered childhood dolls to restore and pass down to their grandkids. Churches also bring in their religious icons, says Elizabeth Pena, who gives tours of the hospital's permanent collection.

ELIZABETH PENA: At this time, we get a lot more baby Jesuses, because everybody is getting their nativity scene ready. And sometimes he's had an accident the year before, so he comes in to be helped out.


FRAYER: The Hospital de Bonecas offers a frugal alternative to Toys R Us. And admissions here are rising with the poor economy. About 17 percent of Portuguese are out of work. Taxes are going up. Poverty is spreading. Hospital bills here start at around $5. Cutileira, the owner, says her business is booming. Perhaps, Europe's economic crisis makes people realize what matters most: family, tradition, history, she says.

CUTILEIRA: (Through translator) We have a tendency to value in a time of crisis what we had when we were happy. These dolls are cherished pieces of family history. When you're running from war or oppression, what you can fit in your handbag is a little doll or a teddy bear who comes with you. That has all the meaning in the world.

FRAYER: Aside from all the dolls who are patched up here and go home, Cutileira has amassed one of the largest doll collections in the world, from 19th century German celluloid dolls to collectors' edition Barbies and some of the oldest known multiracial dolls from Portugal's African colonies. Hundreds of thousands of dolls altogether. Cutileira has no idea how much all this is worth and she doesn't care to find out.

CUTILEIRA: (Through translator) We are a hospital and all patients are valuable to us. They are all treated equally. We know we have lots of dolls here that are valuable, but they're all the same to us. You can't put a value on your sentiments.

FRAYER: Cutileira used to be a teacher. And when she retired, she took over the hospital from her parents. She hopes her daughters will one day do the same. For NPR News, I'm Lauren Frayer.

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