When her parents are drowned at sea, "Princess" Judy is adopted by a soft-hearted old sea captain, Captain Zack, and brought to live on his tugboat.

In the waning days of WWI, a U.S. "Mystery Ship," sets sail for the coast of Spain towing a submarine. Their mission is to find and sink a U-boat that has been especially effective in attacking Allied shipping. Posing as a harmless schooner, the mystery ship is in fact fitted with a formidable gun capable of sinking a U-boat. Stopping in the Canary Islands to refuel, the crew interacts with locals involved with Germans, and with Germans themselves, including the sister of the U-Boat commander, who is lurking offshore waiting for the coming battle.

Dan McFadden builds an apartment house in a working-class neighborhood on New York's East Side called "McFadden's Flats." At the same time, Dan and his wife Nora send their tomboyish daughter Molly to an expensive girls' school to teach her etiquette. Molly only agrees to go after her sweetheart, Sandy MacTavish, convinces her she should. When Dan is unable to complete the apartments because of a lack of money, Sandy's father Jock, a Scottish barber and Dan's best friend, secretly backs Dan's loan at the bank, even though Jock is known for his penny-pinching ways.

In a small town in the South, Jim Preston resents his stepfather, Judge Calhoun Davis, in spite of everything the judge has done to be a father him. "Cal" is the most respected man in town, and makes his judgements in court with authority and generosity.

An Irish crooner flirts with prize-fighting.