It is not interbreeding but inbreeding where sister to brother is done. Line breeding is where you take a grandfather to granddaughter etc.
Line breeding is still done on occasion. Inbreeding is the one primarily frowned upon and can if bred more than once create issues. You will find often when looking through pedigreed lines where a particular dam or sire has been used and will see it on both sides of the line. Sometimes 2 or 3 generations back.
For a long period of time the concept was done to keep the lines intact but with the shrinking gene pool as Orangedog noted, many now bring in dogs from Europe and the UK for breeding purposes. In many cases you will find that American bred dogs have sired or had litters in Europe where they had been bred by or to European dogs. This is to expand the gene pool.
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No I am not a Miniature Doberman, I was around 200 years before Karl Frederich Louis Doberman created the Dobie, and as for my friends the Manx cats, yes they are better at playing fetch than I am, I am a Miniature Pinscher. http://blackhawkkennels.webs.com/
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