Thomas Mallen, penniless, mortgages his farming estate to make ends meet; he attempts to get his only legitimate son, Richard Mallen (David Rintoul) married to Fanny Armstrong, an unattractive girl with a wealthy father; her dowry would save Richard and Thomas from losing their large house and property.
This forces Thomas to move into a small cottage with his late wife's nieces, Barbara (Pippa Guard) and Constance (Julia Chambers), and their governess, Anna Brigmore (Caroline Blakiston), who starts an affair with the now bankrupt squire.
Donald comes to take the child so that he can lay claim to her inheritance from her half-brother Richard, who died in Paris and left money to his cousin, the elder Barbara, which now belongs to her daughter.
Donald hopes that by establishing a claim to the money, he will be able to buy a farm from the new owner of High Banks Hall, Mr Bensham, a Manchester industrialist, for whom Miss Brigmore is now working as a governess.
After a last attempt to change his half brother's mind, Matthew wrestles with Donald, causing them both to fall from their cart down a steep bank and die.
Barbara encounters Michael Radlet (Gerry Sundquist), who is also unaware of his true parentage, at a St Valentine's Day dance.
Miss Brigmore and Constance manage to end their developing relationship by telling their children the truth about Barbara's parentage.
Miss Brigmore's angry reaction to this news alerts Bensham to the depths of her ambition and leads to a temporary breakdown in their previously friendly relationship.
Meanwhile, Constance is courted by Patrick Ferrier, the son of a local baronet whom she knew when she was at High Banks Hall, who has recently returned from India.
Barbara runs away following her row with Michael, but a search party led by Dan Bensham finds her and takes her back to the cottage, where she lapses into a catatonic state.
On his way to fetch a doctor when Sarah goes into labour, Michael meets Barbara, and though he tries to ride on, she forces him to stop by wading into a river.
He tries to stop her, and both are drowned, leaving Mrs Bensham and Constance to rue the terrible consequences of their decisions years earlier.