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Bobby Gillian's grandfather wishes to teach his nephew how to respect the value of money, so in his will, he bequeaths the young man one thousand dollars with the stipulation that he report how he spends it. If Gillian acts as he usually does, the money will be spent in "reprehensible dissipation," the grandfather predicts. But, ironically, young Gillian knows the true worth of money: after all, it is only a means of providing enjoyment in living and loving.
The protagonist of O. Henry's story, young Gillian, seems a frivolous young gentleman who does not appreciate the value of money since repeatedly his uncle has supplied him with a "fairy godmother's" allowance and he has merely squandered it. When his millionaire uncle dies, he bequeaths most of his money to scientific research, doles out $10 and a ring to his servants, and bequeaths a mere $1,000 to Bobby Gillian, his nephew, with the stipulation that he spend it and report to the lawyers how he has dispensed of the money by providing receipts and an itemized list.
Never having had to support himself, Gillian cannot think of a way to spend the entire amount as it seems but a burden to him. So, he goes to the gentleman's club and asks an old curmudgeon named Bryson what he would suggest. Facetiously, he tells Gillian, whom he considers a dandy and a spendthrift, to buy a diamond pendant for Miss Lotta Lauriere, a stage actress. However, when Gillian offers her such a pendant, she derides it as inferior to what another actress has received. Gillian is repulsed by her greed. Finally, after asking others, who offer ideas for investment and making more money, Gillian realizes it is not easy to be rid of $1000. He returns to his uncle's house and speaks with Miss Hayden, a ward of Mr. Gillian, and learns that she only received $10 as the other help did. Moved by this information, Gillian fabricates a tale that the lawyers have found a codicil to the uncle's will that left her a thousand dollars. "Tolman asked me to bring it to you," he tells Miss Hayden, adding, "I suppose, of course... that you know I love you." Miss Hayden just says, "I'm sorry."
Before departing, Gillian writes his accounting for the money:
Paid by the black sheep, Robert Gillian, $1,000 on account of the eternal happiness, owed by Heaven to the best and dearest woman on earth.
Bobby Gillian returns with the tabulation in an envelope to the lawyers. There he learns that his uncle did, indeed, have a codicil to his will; however, it directed the lawyers to award young Gillian $50,000 if he had been "prudent, wise, or unselfish" in spending the $1000. Otherwise, the money was to be paid to Miss Hayden, Mr. Gillian's ward. When Gillian hears this news, he quickly takes back his envelope and tears it into pieces, dropping them into his pocket, "explaining" that he lost the money at the races, so there is no need for them to look at his accounting. He departs, whistling happily in the hallway, much to the surprise of Tolman & Sharp.
This "black sheep" has proven himself one who truly loves, for he unselfishly gives up $50,000 to the woman he adores even though this love is unrequited. Bobby Gillian is not the person his uncle believed him; he is completely uninterested in materialism and perceives money as only to be used for amusement.
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