It is Christmas Eve, and a humble prospector has spent his last cent for food. He is heartbroken to think that he cannot even buy anything for his two small children. When his wife finds a letter to Santa Claus asking for a doll and rocking horse, the prospector is desperate.

Broncho, the vagabond, is thrown out of the gambler's place because he has no money. He is light-hearted, nevertheless, and while strolling through the woods, runs upon a little girl trying to chop some wood. His heart is touched and he helps her. She leads him to the shack she calls home and Broncho is filled with pity when he sees her father sick

John Harlan, a crazy prospector living with his daughter in Nevada, accidentally discovers gold. He is so enthused over it that he immediately goes to the town saloon, where he informs everybody.

David Morgan, a cowpuncher, is informed by Doctor Harding that the former's wife is in a serious condition and must be taken from the high altitude. An Indian horse thief shows David a way to make some money easy. That night, the Indian and the cowpuncher steal two horses. The Indian is captured by Broncho Billy, the sheriff, and squeals on Morgan. Dorothy, the cowpuncher's child, informs her father that a posse is coming up the road. Morgan instructs his child to say nothing to the men concerning his whereabouts. The cowpuncher crawls into the loft and pulls the ladder up after him. Broncho Billy enters, sees Morgan's wife is in a critical condition and asks the child where her father is. She tells him she does not know. The sheriff, hearing a sound above him, is about to fire his revolver into the loft, when the girl confesses that her father is above.

Jim Hendricks receives a letter from his daughter in the east stating that she is on her way and will arrive with her little girl that day. The stagecoach carrying her from the railroad station, some miles from her father's home, meets with an accident. While repairing the vehicle of ancient times, Bessie Hendricks' young daughter, canters off into the woods in search of wild flowers. Bessie runs after her. Having captured the young rascal and returning to the road Bessie discovers the coach has gone on its journey.

Broncho Billy, haying disturbed the laws of the state, is thrown into jail. The warden hands the outlaw a cup of water and a piece of stale bread. The latter grabs the warden's hand, pulls it through the bars and threatens the former with a broken arm unless he unlocks the door. Broncho Billy, having gained his freedom, takes to the woods.

Jim Riley is to be arrested for horse stealing and when the sheriff knocks at the door of Jim's shack, he asks his little girl Nellie to go and tell the man he is not at home. Nellie tries to persuade the big sheriff that her father is out, but to no avail, for Jim is arrested and taken away, while he promises his little girl he will soon return.

Papa's Letter is a 1911 silent drama.