A farmer from the small town of Cross Corners, New Hampshire, Jabez Stone, is plagued with unending bad luck, causing him to finally swear that "it's enough to make a man want to sell his soul to the devil!" Stone is visited the next day by a stranger, who later identifies himself as "Mr. Scratch" and makes such an offer (in exchange for seven years of prosperity), to which Stone agrees.
After the seven years, Stone manages to bargain for an additional three years from Mr. Scratch. However, after the additional three years passes, Mr. Scratch refuses to grant Stone any further extension of time. Wanting out of the deal, Stone convinces famous lawyer and orator Daniel Webster to accept his case.
At midnight of the appointed date, Mr. Scratch arrives and is greeted by Webster, who presents himself as Stone's attorney. Mr. Scratch tells Webster, "I shall call upon you, as a law-abiding citizen, to assist me in taking possession of my property," and so begins the argument. It goes poorly for Webster, since the signature and the contract are clear, and Mr. Scratch will not agree to a compromise.
In desperation Webster thunders, "Mr. Stone is an American citizen, and no American citizen may be forced into the service of a foreign prince. We fought England for that in '12 and we'll fight all hell for it again!" To this Mr. Scratch insists on his citizenship citing his presence at the worst events of the US, concluding that "though I don't like to boast of it, my name is older in this country than yours."
A trial is then demanded by Daniel as the right of every American. Mr. Scratch agrees after Daniel says that he can select the judge and jury, "so it is an American judge and an American jury." A jury of the damned then enters, "with the fires of hell still upon them." They had all done evil, and had all played a part in the formation of the United States:
- Walter Butler, a Loyalist
- Simon Girty, a Loyalist
- Indian chief Metacomet, referred to as "King Philip"
- Governor Thomas Dale
- Thomas Morton, a rival of the Plymouth Pilgrims
- The pirate Edward Teach, also known as Blackbeard
- Reverend John Smeet
After five other unnamed jurors enter (Benedict Arnold not among them, he being out "on other business"), the "Judge" enters last – John Hathorne, the infamous and unrepentant executor of the Salem witch trials.
The trial is rigged against Webster. Eventually he finds himself on his feet and ready to rage, without care for himself or Stone, but he catches himself before he begins to speak: he sees in the jurors' eyes that they want him to act thus. He calms himself, "for it was him they'd come for, not only Jabez Stone."
Webster starts to orate on all of simple and good things – "the freshness of a fine morning...the taste of food when you're hungry...the new day that's every day when you're a child" – and how "without freedom, they sickened." He speaks passionately of how wonderful it is to be human and to be an American. He admits the wrongs done in the course of American history but argues that something new and good had grown from them and that "everybody had played a part in it, even the traitors." Mankind "got tricked and trapped and bamboozled, but it was a great journey," something "no demon that was ever foaled" could ever understand.
The jury announces its verdict: "We find for the defendant, Jabez Stone." They admit that, "Perhaps 'tis not strictly in accordance with the evidence, but even the damned may salute the eloquence of Mr. Webster." The judge and jury disappear with the break of dawn. Mr. Scratch congratulates Webster and the contract is torn up.
Webster then grabs the stranger and twists his arm behind his back, "for he knew that once you bested anybody like Mr. Scratch in fair fight, his power on you was gone." Webster makes him agree "never to bother Jabez Stone nor his heirs or assigns nor any other New Hampshire man till doomsday!"
Mr. Scratch offers to tell Webster's fortune in his palm. He foretells Webster's failure to ever become President, the death of Webster's sons, and the backlash of his last speech, warning "Some will call you Ichabod," as in John Greenleaf Whittier's poem in reaction to Webster's controversial "Seventh of March Speech," in which Webster supported the Compromise of 1850. All the predictions the devil makes are based on actual events of Daniel Webster's life: he did have ambitions to become President, his sons died in war, and as a result of the Seventh of March Speech, many in the North considered Webster a traitor.
Webster takes all the predictions in stride and asks only if the Union will prevail. Scratch reluctantly admits that although a war will be fought over the issue, the United States will remain united. Webster then laughs and kicks him out of the house: "And with that he drew back his foot for a kick that would have stunned a horse. It was only the tip of his shoe that caught the stranger, but he went flying out of the door with his collecting box under his arm." It is said that the Devil never did come back to New Hampshire afterward.