I found this clipping in a 1949 dog food company promotional pamphlet. Apparently Gaines took a cue from the Ripley's Believe it or Not column, but focused on dogs.
I did a little research and this is what I found out. As early as 1600, American colonists and local indigenous people (Manahoac) would set aside their differences for one day and trade furs and produce for prized English hunting dogs. However, the Virginia Assembly passed a law in 1619 forbidding the sale of dogs to Indians. That law was lifted in 1677, and since then, albeit sporadically, the dog auction has taken place in Fredericksburg. Today the auction is more like a celebration of dogs, with canine agility demonstrations, Indian crafts and dog parades. Read more about the Fredericksburg Dog Auction.