LOL, give me some credit, I'm just a kid at "only 76 years old", and you are asking me questions about what Schwinn did in 1938 which was ten years before I was conceived? LOL
Without stirring up another dust storm about BFG bikes. Keep in mind in the early days Schwinn was not a household name. They had the factory production capacity that exceeded what they could market under just the Schwinn brand name. Building privet label product just made sense in the 20's, 30's, and 40's. I believe it's well documented by the dozens of different brand nameplates Schwinn mounted. I'm sure some of the larger dealers had enough volume (and finances) to buy in full truck trailer or railcar shipments (250-300 units). It would have been an easy decision to do a special nameplate, or decal for a store brand bike. I have never spoke to any Schwinn "old timer" that told me how many units were required to do a custom nameplate.
Distributors commonly sold multiple brands "but for a different reason". If you were a West Coast Cycle sales rep and you called on two bicycle dealers across the street from each other, you could not sell both dealers your Nishiki brand. So, they had the Azuki and Cycle Pro lines for the second dealer. Ben Lawee sold Motobecane's and Univega's for the same purpose. Centurion and Diamond Back, same thing. The Schwinn distributor (they had many) had multiple different brands that they could sell to each bicycle dealer in a town.
Most of us would agree, that all of these Schwinn brands "including the fabled BFG bikes" were just different colors, and different Schwinn parts assembled off the shelf, they were not that unique to each other. In my mind, there's no difference between painted rims and chrome rims, it just a different cosmetic finish part bolted onto a Schwinn frame.
All of this was changing, and ending by the time Schwinn was building their strong dealer network. I believe the change started with the Balloon tire which the department stores that Schwinn sold to at the time, did not want any part of new Balloon tires and wanted to stay with the 28" single tube tire style. At that point Schwinn committed to sell its "top level, top spec'd" products only through independent Schwinn bicycle dealers. The dealers needed a different, better product to compete against the larger chain department stores. The change was slow but completed by the late 1950's when Schwinn only sold one brand, and only through Franchised Schwinn Dealers. Later into the 1960's the term Franchised, was dropped, and the term Authorized Schwinn Dealer was adopted and was Schwinn's only customer. During this transition, Schwinn also dropped export sales which were done during the 1940's. Schwinn put all of their trust in the Schwinn Dealer to sell its annual factory production and service its products, and never looked back. It was a profitable relationship for both the Schwinn Company and the independent Schwinn Dealer.
John