While the Dinsmores, Travillas, and Raymonds spend the summer in Nantucket, Lester and Elsie Leland are called to the bedside of Lester's dying brother. His only child, Evelyn, is left in their care. Upon the Lelands' return to Ion from Nantucket, Elsie's dear old mammy, Aunt Chloe, passes away.

Lulu and Evelyn become close friends, and the four families decide to spend the Christmas holidays and winter at Viamede. All the children are enrolled in Oakdale Academy as day students. Lulu, however, gets into trouble when she strikes her teacher with a book, and her stubborn refusal to submit to Mr. Dinsmore's authority is eclipsed only by the news that her father is lost at sea.