Laura Lee Hope 
The Story of a Nodding Donkey [EPUB ebook] 

From the ‘Make Believe Stories’:
The Nodding Donkey dated his birth from the day he received the beautiful coat of varnish in the workshop of Santa Claus at the North Pole. Before that he was just some pieces of wood, glued together. His head was not glued on, however, but was fastened in such a manner that with the least motion the Donkey could nod it up and down, and also sidewise.
It is not every wooden donkey who is able to nod his head in as many ways as could the Donkey about whom I am going to tell you. This Nodding Donkey was an especially fine toy, and, as has been said, his first birthday was that on which he received such a bright, shiny coat of varnish.