Betty Gordon enjoys a Christmas vacation with the Littell family in Washington. One day, while out shopping, Betty meets an unhappy girl named Ida Bellethorne, who works in a store. After Betty loses a locket in the store Ida finds and gives it to the owner but when Betty goes back to the store the owner pretends nothing was found.
"This doesn't look like the street I came up through!" exclaimed Betty Gordon. "These funny streets, with their dear old–fashioned houses, all seem, so much alike! And if there are any names stuck up at the corners they must hide around behind the post when I come by like squirrels in the woods." "I declare, there is a queer little shop stuck right in there between two of those refined–looking, if poverty–stricken, boarding–houses. Dear me! how many come–down–in–the–world families have to take 'paying guests' to help out. Not like the Peabodys, but really needy people. What is it Bobby calls 'em? 'P.G.s'—'paying guests.'" "I was a paying guest at Bramble Farm," ruminated Betty, still staring at the little shop and the houses that flanked it on either side. "And I certainly had a hard time there. Bobby says that these people in Georgetown are the remains of Southern aristocracy that were cast up on this beach as long ago as the Civil War. Unlike the castaways on cannibal islands that we read about, Bobby says these castaways live off the 'P.G.s'—and that's what Joseph Peabody tried to do! He tried to live off me. There! I knew he was a cannibal."