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In dire financial straits, businessman John Baird considers liquidating the bonds that are held in trust for his little daughter Margery. Failing to comprehend her husband's desperation, Virginia Baird refuses his request and, upon overhearing his lawyer advising him to utilize the bonds without consulting her, she decides to place them in the hands of George Drake, an old friend. Drake hijacks the securities, however, and their disappearance leads to the break up of the Baird's marriage, resulting in Virginia leaving the house. Attempting to console her father, Margery sets out on her pony to bring her mother home. But she is held up on the road by Captain Kidd Jr., who adopts her as his first mate, and the two children take up residence on a grass hut on a nearby island.
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