Young Hans (Hetty Galen), the son of a poor shoemaker, meets a magical stranger called Uncle Oley (Chuck McCann), who pays for repairs with a piece of red leather. Hans uses the leather to create shoes for the princess, who dances uncontrollably when she puts on Hans' creation. When Hans tells another young boy about his neighbor's daughter (Sidney Filson), who's selling matches to pay for her grandmother's education, the visiting governor takes notice of Hans' storytelling skills.