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In a police station, a sad, bald-headed boy, who has refused to reveal his name or utter a word, is questioned by Dr. Evans, an expert on "boys." Coaxed by Dr. Evans, the boy, Peter Frye, finally relates his story: After his parents are killed while doing relief work in war-torn Europe, Peter is shipped from relative to relative, until he is taken in by family friend Gramp Frye, an Irish-born widower living in a small town. Although at first wary of his new home, Peter soon comes to trust and respect the understanding Gramp, a former vaudevillian and magician who works nights as a singing waiter. Peter is unaware that his parents are dead, and Gramp, afraid to upset the boy, allows him to believe that they will someday return for him. At his new school, Peter makes friends quickly and later gets a job delivering groceries and joins in a clothing drive for war victims. Peter's newfound happiness ends abruptly, however, when a classmate unwittingly tells him that he is an orphan and compares him to a pathetic-looking boy in a war orphan poster on display at the school. Peter pretends to shrug off the painful news, but is filled with confused feelings about his parents' death. That night, he questions Gramp about death and war, and during their discussion, Gramp mentions that his wife loved to grow green plants, which she felt symbolized the hope of spring. Gramp then promises Peter he will have a surprise waiting for him in the morning. The next day, after Peter takes his bath, he discovers that his hair has turned green and assumes that Gramp is behind the "trick." Gramp, however, tells Peter that his surprise was a magician's scarf and takes Peter to see Dr. Knudson. When the baffled doctor suggests that Peter either dye his hair or cut it off, the boy refuses to consider either option and asks Gramp if he can stay at home until his hair returns to its former color. Eventually, a bored and lonely Peter dares to venture outside and, as he and Gramp walk to school, draws the stares of curious passersby. Although Gramp challenges the hysterical attitudes of his neighbors, some of whom believe Peter's green hair is the result of tainted milk, Peter remains the target of speculation and is ridiculed and ostracized by his schoolmates. Even after Miss Brand, Peter's kindhearted teacher, tries to ease the other children's fears by pointing out that only one child in the class has red hair, Peter feels rejected. That night, Peter tears in two a letter that his father had left for him to read on his sixteenth birthday and runs away to some nearby woods. There, after Peter gives in to his pent-up tears, he hears a young voice calling his name. To his amazement, Peter discovers all of the children from the war orphan posters standing, alive, in the woods. When Michael, the frail poster boy to whom Peter was once compared, suggests that his green hair is the "mark of something good," Peter bristles with sarcasm. Michael soon changes Peter's feelings, however, and advises him to use his unusual hair to call attention to the horrors of war. Following the boy's instructions, the now-inspired Peter goes from adult to adult, explaining to them that his hair is green because he is a war orphan. Peter's words fail to soothe the town's fears, and he is told that he is ruining the milkman's business because the people are convinced that his hair is the result of contaminated milk. When Peter is asked by various adults to cut off his hair, he once again refuses, stating that it has "meaning." He then returns to the woods, hoping to find the poster children there, but instead is chased by his male classmates, who are determined to cut off his hair. Peter escapes from the woods, but when he returns home, Gramp, who wants his foster son to be happy and carefree, suggests that shaving his hair might be the only remedy to his problems. Reluctantly Peter agrees to have his hair cut, but cries silent tears as the barber shaves his head in front of Gramp and a crowd of onlookers. Peter's brave tears cause Gramp and the crowd to grow suddenly ashamed of themselves. Although Gramp later apologizes to Peter for not supporting him, Peter runs away from home. Back in the police station, Dr. Evans gently chides Peter for not having more faith in himself and then returns him to Gramp, who is waiting outside with Dr. Knudson and Miss Brand. Feeling that Peter is now mature enough, Gramp reads from his father's torn letter. Written shortly before his father's death, the letter reassures Peter of his parents' love and asks him to remind people who might otherwise forget about the terrible price of war. Moved by the letter, Peter declares that he hopes his hair will grow back green and returns home with his proud foster father.