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Dan McFadden builds an apartment house in a working-class neighborhood on New York's East Side called "McFadden's Flats." At the same time, Dan and his wife Nora send their tomboyish daughter Molly to an expensive girls' school to teach her etiquette. Molly only agrees to go after her sweetheart, Sandy MacTavish, convinces her she should. When Dan is unable to complete the apartments because of a lack of money, Sandy's father Jock, a Scottish barber and Dan's best friend, secretly backs Dan's loan at the bank, even though Jock is known for his penny-pinching ways. When Jock mistakenly shaves off a clump of hair from the back of Dan's head, however, then wants to charge him for the cut, Dan ends their friendship. With Jock's loan, Dan finishes his tenement, while Molly spends the summer at her classmate Mary Ellen Hall's estate outside Chicago. Molly, who has turned into a lady and has fallen for Mary Ellen's brother Robert, denies her working-class background. Mr. Hall, head of a major construction firm, offers to go into business with Dan after he opens a New York office and is eager to meet him. Dan is elected president of the hod-carriers union and gets to lead the Labor Day Parade. Molly happens to be in town for the event with the Halls, who view the parade with haughty eyes from a hotel balcony. When Dan recognizes his daughter, he proudly blows her a kiss from the street, but she pretends not to know him, breaking his heart. Later, at home, Dan scolds Molly for her behavior, and she apologizes, but convinces her father to transform their flat into a fancy, modern apartment in time for Halls' return from Boston. The McFaddens then host a housewarming party, sending invitations to all their neighbors. The night of the party, Mary Ellen calls and Dan spontaneously invites the Halls. Robert arrives drunk and makes a pass at Molly, after telling her his mother has forbidden him to marry her and insulting her father. Sandy, who was broken-hearted to find Molly so attentive to the Halls, hits Robert for accosting Molly. Mr. Hall and Dan, meanwhile, have been getting drunk together and have discovered they are from the same neighborhood, where they both started out as bricklayers. During their drunken reverie, they have a contest to see who can first complete a wall made out of books. Mrs. Hall leaves in a huff, calling the McFaddens "riff-raff," and Dan is sure he has lost his chance to do business with Hall. Dan then learns it was Jock who guaranteed his loan, which is overdue, and reaffirms their friendship, while Sandy and Molly kiss. Hall then returns and congratulates Sandy for hitting Robert, something, he says, he should have done years ago, and assures Dan the deal will take place.