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On a spring day in 1853 in Rome, New York, jack-of-all-trades Fortune Friendly explains to little Della how the Erie Canal transports goods and provides the link between Europe and the western United States.  The "season," during which boats carry cargo through New York to Lake Erie, will begin the next day, and the residents of Rome excitedly make their preparations.  The leading boater and resident bully, Jotham Klore, arrives with his cook and sweetheart, Molly Larkins, while farmer Dan Harrow also arrives and meets Sam Weaver, for whom he will work while saving to buy a farm.

The canalers are fearful of the encroaching railroad, which is threatening to cut their business, and when Dan and Molly meet for the first time, she is insulted when he says that the railroads are the way of the future.  Despite Molly's passion for the canal and Dan's preference for the soil, they are attracted to each other, and Dan is disappointed when Molly chooses to stay with Jotham rather than cook for him.

Jotham and Molly head for Rochester, and on the way they encounter actor Junius Brutus Booth and his son John Wilkes, who claims that he will someday be as famous as Abraham Lincoln.  After their arrival in Rochester, Molly meets Dan again while Jotham recovers from his drinking binge of the previous night.

Molly becomes fed up with Jotham's mean temperament and quits to work for Dan, despite her misgivings that the gentle farmer may be a coward.  Soon after, Sam wins in the Ohio state lottery and gives Dan a half-share in his boat.  The excited Dan proposes to Molly, who accepts with the condition that they finish the season and see how they get along.  They agree not to discuss the canal or farming, and three months pass as the young couple fall more in love.

Jotham, meanwhile, has spent the three months in jail for fighting and, when he is released, he vows to get Dan for stealing Molly.  Molly and Dan go the Oneida County Fair, and there Molly learns that Jotham is searching for Dan.  Dan, who has just closed a deal for a farm, tells Molly that they must leave immediately, and Molly assumes that Dan is running away from Jotham.

Later, when Molly learns about the farm, she feels that Dan has betrayed her by not giving himself more time to like the canal life.  She breaks off their engagement, and Dan gives her his half-interest in the boat and leaves.

A month later, Fortune visits Dan on his farm and tells him a tall tale about Molly suffering from the insults of the canalers, who taunt her for having worked for a coward.  Fortune's plan to reunite Dan and Molly almost succeeds when Dan returns to Rome to defend Molly's honor. Dan bests Jotham in a fistfight, but when Molly assumes that he will stay on the canal, Dan tells her that he is not interested in being a bully or staying on the river, but in leading a quiet life farming.  He leaves, but soon after, Molly arrives on his farm and announces her intention to stay, by asking where the kitchen is.