During World War I, John Stevens invents an anti-submarine device, but the plans are stolen by two German spies, the Baron von Wiederholtz and Madame Elsa, who flee to a New York hotel. Stevens' daughter Alice pursues the spies hoping to retrieve the plans.

In the slums of New York, David Darrow runs a settlement house called "The Angel Factory" in which he tries to help those oppressed by tenement life. In the course of his work, Darrow meets Florence, an innocent young girl of the slums, and is attracted to her sweetness. Betty, Darrow's snobbish fiancée, becomes jealous and invites Florence to a reception, hoping to embarrass the girl. Florence comports herself admirably, however, and wins the respect of all present. The next day, on his way to the settlement house, Darrow is followed by gangster Tony Podessa, a jealous man from Florence's past. As Florence watches the two men confront each other, Tony is killed by a mysterious shot. The police arrive and arrest Darrow for the murder.

While honeymooning in Paris, wealthy John Battleby Watts is persuaded to purchase a $20,000 necklace for his capricious young wife. When the jeweler refuses to accept his check, John heads to the bank for the necessary funds. En route, he passes a little shop specializing in imitation jewelry. Figuring his wife will never know the difference, he buys a cheap duplicate of the 20-grand bauble. Later on, however, he reconsiders and purchases the genuine article. But before he can reach his hotel, John is detained by saucy chorus girl Rita Bori, whom he presents with what he thinks is the imitation necklace.