The Merrymaker was created by Detective Comics writer John Layman during Death of the Family.
As a psychiatrist, Dr. Byron Merideth worked for a short time in Arkham Asylum. When he saw the adoration on the face of Dr. Harleen Quinzel when she looked at the Joker, he saw a chance to make a profit, and went in to private practice specializing in people with an obsession in the Joker. When the Joker returned to Gotham after his year of absence, Merideth created The Merrymaker and the League of Smiles, so that they would cause distractions while he committed crimes.
His plan is foiled by Batman, and Merideth is sent to Arkham Asylum when he is diagnosed as a psychopath by a Joker obsessed psychiatrist.