By marrying Lingard’s adopted Malay daughter, Almayer inherits that prosperous merchant’s business and his plans for amassing a huge fortune in gold from rich mines up the Pantai River. Almayer and his wife have one daughter, Nina, a beautiful girl, who was sent to Singapore and for ten years was educated as a European. She returns home to Sambir unexpectedly at the end of that time, for she cannot bear to be treated as a half-caste in a white community. Unsuccessful in business, Almayer nurses dim hopes that he can find a gold mine and, his fortune made, take Nina to Amsterdam to spend his last days in prosperous retirement.
News that the English are to seize control of the Pantai River causes Almayer to begin building a new house in his compound, not far removed from the one in which he is living. He wants a house fine enough to receive the British. When the project is abandoned and the Dutch are left in nominal power, Almayer stops work on his new house. A company of Dutch seamen christens the structure “Almayer’s Folly.”
Lakamba, the native rajah, has a compound across the river from Almayer’s home. There he lives with his women, his slaves, and his principal aide, Babalatchi. Lakamba keeps close watch on Almayer as he leaves for several days at a time with a few of his men. After a time, Almayer gives up his trips and settles down to empty daydreams on his rotten wharf. His native wife despises him.
Nina’s presence in Sambir offers another problem for Almayer, for the young men of the settlement are eyeing her with interest. One day, Dain Maroola, the handsome son of a Malayan rajah, comes sailing up the river in a brig to trade with Almayer. After conversations with Lakamba and long conferences with Almayer, Dain gets the gunpowder he seeks. Meanwhile, he falls passionately in love with Nina. One night, she comes into the women’s room in her father’s house and discovers her mother counting out the money Dain is giving her in payment for Nina. Mrs. Almayer was arranging meetings between Nina and Dain and giving them warning at the approach of Almayer. Mrs. Almayer wishes her daughter to remain native. She has a deep distrust of white men and their ways.
Dain goes away, promising that he will return to help Almayer in locating the hidden gold mine. When he does return, he sees Almayer for just a moment and then hurries to see Lakamba. He tells the rajah that his brig fell into the hands of the Dutch and that he narrowly escaped with one slave. Most of his men were killed, and in a day or two, the Dutch will be up the Pantai looking for him.
After this interview, Lakamba tells Babalatchi he must poison Almayer before the arrival of the Dutch. Now that Dain knows where the gold treasure is located, Almayer is no longer needed. If allowed to live, he might reveal his secret to the white men.
The next morning, the body of a Malay is found floating in the river. The corpse is beyond recognition, but it wears an anklet and a ring that belonged to Dain. Almayer is overcome with grief, for Dain was his last hope of finding the gold. The Dutch officers who come looking for Dain tell how he escaped. As the Dutch approach his brig, the gunpowder it carries ignites and blows up the boat, killing two of the Dutch. Almayer promises his visitors that after they dine he will deliver Dain into...
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Meanwhile, Babalatchi is telling Lakamba the true story of Dain. Nina was waiting for the young Malay on the night of his conference with Lakamba, and she took him to a secluded clearing farther up the river. He is now hiding there. The corpse that floated down the river is that of his slave, who died when the canoe overturned. Mrs. Almayer suggested that Dain put his anklet and ring on the body and let it float down the river. Lakamba and Babalatchi plan Dain’s escape from his Dutch enemies. Knowing that Dain will not leave without Nina, Babalatchi and Mrs. Almayer plot to get her away from Almayer, who is drinking with the Dutch. After some persuasion, Almayer leads his guests to the grave of the man recovered from the river. The Dutch take the anklet and ring as proof that Dain is dead. Then they leave for the night.
Nina, willing to go with Dain, feels an urge to see her father once more before she leaves, but her mother will not let her go into the house where her father lies in a drunken sleep. Nina goes to the clearing where Dain is hiding. Soon afterward, a slave girl awakens Almayer and tells him of Nina’s whereabouts. Almayer is panic-stricken. He traces Nina to Dain’s enclosure and begs her to come back to him, but she will not. She does not want to run the risk of insults from white people. With Dain she will be a ranee, and she will be married to a Malay, a brave warrior, not a lying, cowardly white man. Almayer threatens to send his servant to tell the Dutch of Dain’s hiding place.
While they argue, Babalatchi approaches and cries out that the slave girl revealed Dain’s hiding place to the Dutch, who are now on their way to capture the young Malay. Babalatchi, astounded when Dain announces that he will stay with Nina, leaves them to their fate. After he leaves, Almayer says he will never forgive Nina, but he offers to take the two to the mouth of the river. In heavy darkness, the fugitive lovers escape their pursuers.
On an island at the mouth of the river Dain, Nina, and Almayer await the canoe that will take the lovers to Lakamba’s hidden boat. After the two have gone, Almayer covers up Nina’s footprints and returns to his house up the river. His compound is deserted.
Mrs. Almayer and her women go to Lakamba for protection, taking Dain’s gift of money. Almayer finds the old rusty key to his unused office. He goes inside, breaks up the furniture, and piles it in the middle of the room. When he comes out, he throws the key into the river and sits on his porch until the flames began to billow from his office. He burns down his old house and lives out the rest of his days in “Almayer’s Folly.” Eventually, he begins the practice of smoking opium in an effort to forget his daughter, Nina. By the time he dies, the opium gives his eyes the look of one who indeed succeeded in forgetting.