When Newtall died, the herd and breeding methods were passed to Newtall's son-in-law, Juan Falabella. Juan added additional bloodlines, including the Welsh Pony, Shetland pony, and small Thoroughbreds. With considerable inbreeding, he was able to gain consistently small size within the herd.
The passing of Newtall's herd management and breeding practices to Juan Falabella, coupled with the introduction of new bloodlines like Welsh ponies, Shetland ponies, and small Thoroughbreds, resulted in consistently smaller herd size achieved through inbreeding.