In the weeks leading up to Christmas Macy's executive Doris Walker hired Kris Kringle to take over for an intoxicated man who had originally been hired to portray Santa Claus in the Macy Thanksgiving Parade. After the parade Walker and toy department manager Shellhammer decided to hire Kringle to be their Santa for the season. Because Kringle soon claimed to be the real Santa Claus, Walker and Shellhammer at first wanted to discharge him, but after Macy found out about the good work Kringle was doing decided to keep him on but send him to Sawyer for testing.
Sawyer took an immediate dislike to Kringle, and after the initial testing was done went to Walker and Shellhammer with his recommendation that Kringle be discharged. However after meeting with the doctor who ran the place where Kringle had been staying Walker and Shellhammer decided to keep Kringle on, and the two soon grew to accept Kringle and became friends with him.
Kringle soon learned that because fellow employee Albert liked working with children that Sawyer was paying extra attention to him. Albert was upset because of all the things Sawyer said was wrong with him - that he had issues with his father and the like. Seeing how it distressed the young man Kringle went to confront Sawyer, and when Sawyer began acting aggressively and ordering Kringle to leave Kringle tapped him on the head with his cane. Sawyer played up his injuries, seeing this confrontation as a way of getting rid of Kringle. He managed to have Kringle detained for mental examination. Kringle, feeling betrayed, deliberately failed his mental examination and the staff at Bellevue recommended he be committed.
Macy, meanwhile hauled Sawyer into his office and ordered him to drop the matter before he wound up with a second bump to match the one he got from Kris. By then it was too late to drop the matter as medical professionals had examined him and recommended him for commitment.
By then Kringle's lawyer friend Fred Gailey intervened on Kringle's behalf, and a hearing was called to determine if Kringle should be committed. Macy testified at the trial and after finishing he asked Sawyer if he had graduated from a correspondence school before firing him. After the post office delivered a large number of letters to Santa at the courthouse Judge Harper released Kringle.