Mr. Jefferson reads the book of Rip Van Winkle. Rip Van Winkle appears to him in a reverie as an idle young fellow, whose wife labors at the wash tub to make a scanty livelihood for their daughter Meenie and herself. Rip spent all the money he obtained in mortgaging his property to Derrick von Beekman, the wealthy money lender of the village of Fallen Waters, who has taken all of Rip’s lands. The property was only mortgaged, but if it were sold to pay off this mortgage, it would sell for more than enough to pay off the loan on the land, and the balance would revert to Rip Van Winkle. Derrick von Beekman, being notified of this by his counselor, tries to get Rip to sign away all claims on the mortgages. To induce Rip to do this, he voluntarily lends him sixteen pounds to be paid twenty years from date, without interest. Rip is persuaded by von Beekman to accept the money and starts anew by standing treat to the whole village. Von Beekman tries to get Rip to sign away all his claims, but Rip places the document in his game bag and decides to think it over. Then he goes home to face his wife, Gretchen, and tries to make up for staying out all night in the mountains. He finds no one at home but the children. They come to him and ask him to make a boat for them. He does so. Having no sail to the boat, he thinks of the paper in his game bag, and places it on the mast. While sailing it in the tub, little Heinrich Vedder. Son of Nick Vedder, the innkeeper, tells Rip there is writing on it. Rip reads the letter that Derrick von Beekman is trying to get him to sign, and finds out why Derrick was in such a hurry. Rip later attends a dance. Amid the frivolities, Gretchen, Rip’s wife, catches him embracing one of the girls. She chases him through the house with a club, throwing chairs at him, and Rip and his dog, Schneider, make their exit and take to the mountains. A storm comes up in which little Meenie and little Heinrich are afraid of lightning. Heinrich tells Meenie the cause of the lightning, saying that Henderick Hudson and his crew, who live in the mountains, produce the lightning and thunder by playing ten pins and Henderick Hudson lighting his pipe. Rip, who is in the storm, returns home and, as his custom is, he throws his hat in the window, the children try to warn Rip that Gretchen is hiding, but he is caught by the ear and dragged into the house. Gretchen, while scolding him, takes from his game bag a flask of whiskey, which she puts in her pocket. Rip, in turn, steals the bottle from her apron. He swears that he will never drink again. Gretchen, pleased, goes to Meenie and tells her that her father has sworn off, but returns only to find that Rip has lied to her and is drinking the liquor. She takes the bottle from him, throws it out of the window, and demands that Rip leave the house never to return again. He and his dog, Schneider, go to the mountains. After long climbing, he misses his bottle and sends Schneider for it. Schneider returns to the house, finds Rip’s bottle and brings it to him. Rip rewards Schneider by giving him the only crust of bread left in the game bag. Schneider becomes afraid of something and deserts Rip. Rip, looking for the cause of Schneider’s fear, turns and sees a strange little being carrying a keg, clambering up the mountain side, who comes to him and in dumb language asks him to carry the keg up the mountain. Rip agrees to carry this for the strange being. Arriving at the home of Henderick Hudson, Rip is induced to drink of the strange liquor in the keg, and falls into a long sleep which lasts for twenty years. Rip, thought to have been lost in the mountains and died, von Beekman importunes Rip’s wife, who is now in poverty. Meenie, now a grown girl, is pursued by his nephew. Cockles, who insults her. Young Henderick Vedder avenges the insult, by knocking Cockles down. Nick Vedder, now old and feeble, realizing that the end is near, betrothes Meenie and Henderick. Von Beekman, at the punishment of his nephew, tells Gretchen that he is going to turn Nick Vedder and his family into the street. He goes to the inn, but is stopped from entering by Meenie, who tells him that Nick has passed away. Henderick, who cannot make the inn pay, decides to go with his uncle on a whaling voyage. He leaves Meenie heartbroken, and departs on the whaling boat. After a time the ship is wrecked and Henderick is cast on an island from which he is eventually rescued. Von Beekman and Cockles force themselves on Meenie and Gretchen. Gretchen finally decides to marry von Beekman to gain wealth. Upon hearing the news of Henderick’s death, she is fatally stricken. Time passes and Rip is still in slumberland. Cockles, still anxious to marry Meenie, urges his uncle to force her into marriage. Meanwhile Henderick thinks that his child sweetheart is still waiting for him. Rip has now awakened from his slumber and finds everything changed. He cannot realize that he has been asleep but for one night. He returns to the village of Fallen Waters. On making inquiries, he is told that Meenie is to be married to Cockles. When he explains that he is Rip Van Winkle, he is looked upon as a crazy hermit. The wedding is about to take place. Henderick returns in time to prevent the marriage. Knocking Cockles down, he seizes Meenie and rushes from the church. On the way home they see an old man. Having compassion on him, they hurry him home. He realizes where he is and explains that he once had a little girl Meenie, and that he is Rip Van Winkle. Meenie tells him that she is Meenie Van Winkle and that her father went away twenty years ago and never returned. Rip looks into her face and recognizes his daughter. In the meantime, the people from the church have come to the house and attempt to come in. Henderick holds them back, but Rip, remembering the paper von Beekman wanted him to sign, tells Henderick to let him in. The paper proves that the property belongs to Rip. Cockles and Derrick both realize that they have lost everything, as Rip orders them from the house. The crowd, learning that Derrick has caused Rip’s trouble, stone the two villains from the village. Meenie offers her father a stimulant, but he refuses at first but finally consents to drink his famous toast: “Here’s to your health and your family; may they live long and prosper.” The scene fades from this happy reunion to Mr. Jefferson finishing the works of his beloved father.