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Following the Civil War, carpetbagger Benedict Holden takes over as adjutant general in a small Texas town and taxes the townspeople beyond their means. He terrorizes those who refuse to pay, pilfers greenbacks for himself, and conspires to gain control of the black vote by bribing black leaders with Confederate money. When armed rebels resist taxation, Holden declares martial law, ordering all citizens to surrender their arms. Meanwhile, Union Captain John Ashley returns and learns from Holden that John's best friend, Dick Terry, is the leader of the local rebels. When John visits the Terrys' tavern, his former fiancée, Virginia Terry, rebuffs him as a traitor. When John sees Holden's troops shooting unarmed rebels in the back, he and his friend Jed join Holden's forces in order to warn the tax dodgers against the troops. Jed then gets access to the accounting records that prove Holden's embezzlement. Union Captain Hays, suspecting John, orders him to arrest Dick. Holden's men find Dick escaping with ammunition and almost shoot him, until John fires on them and Dick escapes. When Dick arrives home, the rebels stage his fake funeral. John and Jed are caught by Holden and Hays and placed in a cell to be court-martialed in the morning. While Dick organizes a vigilante group to save John and Jed, the governor of Texas arrives to interrogate Holden. Holden is exonerated, until John and Jed escape and reveal Holden's stash of greenbacks. In a scuffle, Holden and Hays are shot by their own troops, who believe they are John and Jed, and the governor promises to disband the troops after an investigation.