Sir John Frugal, a rich merchant, has redeemed his wayward brother, Luke Frugal, from prison and invited him to live in his home. Luke is treated as a servant by the materialistic Lady Frugal and her daughters, Anne and Mary. Lord Lacy, father of Sir Maurice (a suitor to Anne), meets Luke and questions whether Sir John cares for the welfare of the people he loans money to.
Hoist, Fortune and Penury, Sir John's debtors, claim they are unable to repay their loans. Luke pleads their cases and convinces Sir John to delay the settlement. Lord Lacy, overhearing, praises Sir John's charity but questions his treatment of Luke. Sir John vows to be guided by Lord Lacy. Meanwhile, Luke convinces his brother's apprentices, Goldwire and Tradewell, to steal from their master by forging his accounts.
Sir Maurice and Mr Plenty propose marriage to Anne and Mary, but when the ladies demand opulent homes and luxuries, the suitors retract their offer.
Shave'em the whore is visited by Ramble and Scuffle. A fight breaks out and Goldwire comes to her rescue disguised as a Justice of the Peace. Shave'em promises to be constant to Goldwire alone.
Meanwhile, Lady Frugal and her daughters learn that Sir John has entered a monastery due to their pride and disobedience, and that he has bestowed all his belongings to his brother. Luke embraces his new power and wealth, little knowing that Sir John has returned, disguised, to watch the disorder unfold...