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During the 1860s, the mighty Red Witch sails the South Pacific under the ruthless command of its skipper, Capt. Ralls. One day, Ralls decides to "scuttle," or intentionally ground the ship, which is carrying five million dollars in gold bullion. Ralls orders his assistant, Antonio "Ripper" Arrezo, to lock the navigator, Loring, inside his cabin while he drives the ship onto a reef. When it sinks, the crew abandons ship. Later, First Mate Sam Rosen, Ripper and Capt. Ralls are called before a court of inquiry, at which Loring testifies that Mayrant Ruysdaal Sidneye, whose trading company, Batjak, owned the ship, had sent Ralls an order relieving him of his duties. When questioned, Ralls lies, saying that he never received the message. Sidneye's brother, who is one of the judges at the inquest, asks Ralls how he managed to be rescued so quickly, only twelve hours after the wreck, but before he can answer, a messenger arrives with word that Sidneye has withdrawn his complaint. Later, Ralls and Sam set sail for the island near where the wreck occurred, and are followed by Sidneye. Ashore, Sam sees Sidneye's niece, Teleia Van Schreeven, swimming in the lagoon, and she invites him to dinner that evening. After Teleia overhears her uncle plotting against them, she warns Sam and Ralls that their lives may be in danger. They enter despite her warning, and Sidneye accuses Ralls of scuttling the ship. Sidneye then explains that seven years ago, after he rescued Ralls from the ocean, he agreed to a deal whereby Ralls would show Sidneye the location of some sunken pearls in exchange for command of the Witch . Sidneye agreed to the arrangement, but after Ralls identified the location, Sidneye had him thrown in the brig. Later, Commissar Jacques Desaix and his daughter Angelique meet Sidneye on the island. Desaix tells them of the natives' pearl-diving challenge which involves diving into an octopus' den to retrieve a sunken chest of pearls. When a challenger attempts it, he becomes stuck in a giant seashell and must be rescued by Ralls. Later, Desaix pressures Angelique to accept Sidneye's proposal of marriage. When Ralls learns of the engagement, he gets drunk and dives down to the octopus den. He tries to leave the den with the chest, but the octopus attacks, so he kills it with a knife. At his bedside, Ralls tells Angelique about his near-death experience. Angelique confesses her love for Ralls, and that evening, they attend a festival together. After the native chief determines that the pearls rightfully belong to Ralls, Desaix tries to have him arrested. Later, Teleia tells Sam that Ralls first met Angelique when the Witch arrived in Bali to pick up the gold. After he sees Ralls kissing Angelique, Sidneye begs him to leave the island. Later, Angelique sickens and dies, while Ralls's ship sets sail, only to explode passing over a submerged gate at the lagoon's entrance. Believing that he has killed Ralls, Sidneye is surprised when he walks in moments later unharmed. Finally, Ralls agrees to try to retrieve the gold from the wrecked ship, which teeters precariously on an underwater ledge. After loading the dive basket with gold, Ralls becomes trapped by debris and dies.