A wealthy banker is a strict disciplinarian with his nine-year-old son Bill. Finally the day comes when neither Bill nor his mother can put up any more with the father's relentlessness and heavy-handed treatment; she leaves and takes Bill with her. The father must decide what's more important--maintaining his iron discipline over his family, or his family itself.

Penrod and his gang don't want to let neighborhood "goodie-goodie" Georgie Bassett into their club, but Penrod's father pressures him to allow the boy in because his parents are wealthy and prominent members of the town. Finally the boys agree to let Georgie join, but first they demand that he undergo an "initiation", and they're determined to make it one that Georgie won't soon forget.