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Martin W. Semple dies and leaves $20 million to his nephew, Longfellow Deeds, a tuba-playing resident of Mandrake Falls, which is a small town in Vermont. John Cedar, the deceased's lawyer, and Cornelius Cobb, a press agent, tell Deeds about his fortune and take him to New York City. Deeds quickly becomes tangled in the problems of the rich, including being the chairman of the board of the local opera company and dismissing a false claimant to the estate. Meanwhile, Cedar tries to obtain power of attorney from Deeds to cover up the half million dollars his firm embezzled from the estate. Cobb fights off the press, with the exception of Pulitzer Prize-winning reporter Babe Bennett, who poses as impoverished Mary Dawson to get a scoop on Deeds. She faints in front of the kindhearted Deeds, who takes her to a restaurant and falls for her almost immediately. The restaurant is a favorite spot for famous writers, and after being introduced to some poets he admires, Deeds realizes they are ridiculing his greeting card poetry. He punches two of the sneering poets, but lets one of them, Morrow, take him on an all-night binge. The normally temperate Deeds gets drunk, feeds donuts to a horse and, wearing only his underwear, is escorted home by the police. The next day a newspaper article appears chronicling his adventures and branding him "The Cinderella Man." Cobb restrains Deeds from any rash action, and although hurt by the article, Deeds carries on. Weeks pass, and Cedar is distraught about not obtaining power of attorney from Deeds, while Mr. and Mrs. Semple, Deeds' cousins, come to the law firm to make a claim against him. During this time, Babe, who is falling in love with Deeds, continues to secretly publish inflammatory articles about him. Soon Deeds and society hostess Madame Pomponi hold a charity reception, but Deeds, sick of his guests' arrogance and eager to keep a date with Babe, throws them out, then rushes to Babe's apartment, gives her a poem and proposes. She quits her job the next morning, hoping that Deeds will forgive her when she tells him the truth. At the same time she is quitting, however, Cobb is revealing her identity to Deeds, who is crushed. He is about to leave for Mandrake Falls when a starving farmer bursts in and accuses him of neglecting the poor by wasting his money on high society high jinks. Inspired by the man's pleas, Deeds decides to give farms to needy families, and devises an $18 million dispersement plan, which horrifies Cedar and the Semples, who have Deeds arrested on an insanity charge. At the sanity hearing, the dispirited Deeds refuses to defend himself, preferring to listen silently to the exaggerations and lies told about him. When Judge May concludes that Deeds must be committed to an asylum, Babe protests in open court, explaining that Deeds is not defending himself because he has been hurt by her and the others. Under cross-examination by Cedar, she admits she loves Deeds, while her editor, MacWade, Cobb and the farmers all urge him to defend himself. He finally takes the stand and points out the eccentricities of others in the courtroom, including those of Judge May and the psychiatrist, then explains that he is giving the money away to those who need it most. Judge May dismisses all the charges against Deeds and the crowd sweeps Deeds out, while Babe remains weeping until he returns to carry her away.