The film begins with Ernie using his ingenuity to overcome his poverty and find a way to feed his little sister Farina and his steed, Dinah the mule. He encounters Jackie, who is selling newspapers, and learns about a kidnapper who is at large. Ernie then stumbles into a secret meeting of several young boys, including Mickey Daniels and Jack Davis, who call themselves the JJJs (Jesse James Juniors). They tell him that he is unwelcome in their meeting unless he can tell them what good deed he has ever done. He responds by spinning a long, and very unbelievable, tall tale of how he, Jackie, and Dinah rescued Peggy from the kidnappers. At the end of his story he claims that he used his reward money to buy a whole town, name it Free Town, and make himself Mayor and Jackie the Chief of Police. It is a beautiful town where all the children have plenty to eat, have nice clothes, and can have all the cake and candy they want. The story, and the film, ends with reality as Ernie’s mother finds him and hauls him and Farina back home.
