Oswald Lane is welcomed by his hometown as a war hero and enjoys recounting his adventures to anyone who will listen. He accepts an invitation to stay in the home of his rather colorless brother, Andrew, and is soon not only making love to Martha, the Belgian maid, but is also finding Andrew's wife, Hester, receptive to his flirting. After stealing money entrusted to Andrew by his church, Oswald is on his way out of town when he passes a school fire, rescues several children, and is himself seriously burned. Andrew offers his own skin for grafting, and Oswald directs Hester to return the money.

Captain Duncan McTeague, ashore in Southport, finds a deserted baby boy with a note and half of a dollar bill pinned to its clothing. The note states that the mother hopes some day to return and identify the child with the other half of the dollar bill. McTeague raises the child. When he is four years old, the captain discharges his mate Martin Webber, who seeks revenge by kidnapping the boy.