Three months later Annie has bad boilers and is losing business. She tries to borrow money to get new boilers and finally gets a loan. While she is ashore, Terry takes the boat out for a job and runs into a ferry boat. Annie sees what happened and rips up the check. Annie's boat Narcissus is auctioned for $3200 to pay the ferry company. Reynolds bought it and asks Annie to be skipper to haul garbage. Pat visits Annie, who gives her a baby photo of Alec. On a garbage run Annie and Terry see a storm coming. Alec's steamship is damaged in the storm. Annie worries about Alec, sees the distress flare, and goes to help. Alec shoots a line to the Narcissus, and Terry ties the line. Annie refuses to cast off the line despite the danger. Terry heroically repairs the tubes in the boiler with plugs amid much smoke. Their boat holds the steamship. Annie, Alec, and Pat visit bandaged Terry in the hospital. The steamship company buys the Narcissus, renovates it, and gives it back to Annie and Terry. In the final scene Annie finds a bottle in Terry's arm-sling.

Terry's drinking is played for laughs, but it causes much grief. Yet the struggles of Annie and Terry represent the difficulties of many, who hope their children will have a better life.