The Goodyear Welted Shoe
A welt is a strip of leather that is stitched to the upper and insole of a shoe, as an attach-point for the sole. The space enclosed by the welt is then filled with cork or some other filler material (usually either porous or perforated, for breath-ability), and the outsole is both cemented and stitched to the welt.
This process of making shoes is referred to as a Goodyear Welt construction; the machinery used for this process was invented by the son of Charles Goodyear. Footwear with other types of construction may also have welts for finished appearance, but they generally serve little to no structural purpose.