Gretchen, an abandoned child, is raised by Frau Van Lom, the nastiest woman in the little Dutch village of Olenburg. As she grows up, Gretcen's few moments of happiness are those she spends with Carl, who is also an abandoned child, but who is raised by a poor family. When Gretchen refuses to marry a wealthy old man in exchange for his paying off Frau von Lom's mortgage, she is framed for theft and jailed. On top of that, Carl is taken away from the village and sent to the palace of the king. Complications ensue.