14-year-old orphan Ragged Dick earns for his living on the streets of New York polishing to a shine shoes of passers. Despite his honesty, initiative and hard work, he almost always sits without a penny in his pocket, and therefore gladly accepts invitation of a rich merchant Mr. Whitney to arrange a tour around the city for his nephew, a young man named Frank.
During the tour, the reader learns a lot of intriguing facts about New York streets and permanent residents - petty thieves, thimble riggers and other crooks. Impressed with Dick’s natural intelligence and uncommon wit, Frank advises him to go to school, but penniless beggar cannot afford regular schooling and instead of it begins to take lessons from his friend Henry Fosdick, who once has attended school, but stayed on the street after the death of his parents. In order to reward Henry, Dick lets him lodge in his room, rented by his own money, and invites Henry to become a business partner.
Boys’ life doesn’t differ of diversity. It is an 18 hours work a day and frequent clashes with street thugs, the most desperate of which is thick Mickey Maguire. But fate, disposed toward modest and hard-working members of the American society asserts itself soon.
Going by a ferry to Brooklyn, Dick and Henry become bystanders of a dreadful accident: a little boy falls overboard and his wailing father offers a huge reward for saving his son. Great athlete and swimmer, Dick without hesitating throws himself into the water and saves the boy who turns out to be a son of James Rockwell, a famous industrialist and financier. The last hires Dick (which is called how by his real name Richard Hunter) as a clerk to his New York office, having decided his financial problems once and for all.
Returning once to his old room, young clerk discovers his perpetual enemy Mickey Maguire having pulled the rags, which served as the only clothing for Ragged Dick for many years, and here he understands that his old life is over forever.