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Because of theological doubts, the Rev. Mr. Hale gives up his living as a Church of England priest. He, his wife, and their daughter, Margaret, leave the idyllic village of Helstone, in Hampshire in the South, and move to Milton, an industrial town in the North. For most of her youth Margaret, now eighteen or nineteen, has been brought up in London by her wealthy Aunt Shaw; she has rejoined her parents only after the marriage of her vivacious but shallow cousin Edith to Captain Lennox. The captain's brother, Henry, a rising barrister, had asked for Margaret's hand but, regarding him as just a friend, she declined his offer.
Settling in smoky Milton, the Hale women are troubled by urban dirt and commercial go-getting. Mr. Hale now works as a tutor. His favourite pupil is the important manufacturer, Mr. Thornton. Staying to tea, Thornton debates with the naive, "humanistic" Hales about the condition of the working class, strikes, and the other mill owners. Margaret sees Thornton as coarse and unfeeling but also as admirable in the way he's made his way up from poverty. He sees her as haughty but lovely and intelligent.
Margaret begins to warm up to Milton when she befriends Nicholas Higgins, a factory worker, and his consumptive daughter Bessy, who is about Margaret’s age. Margaret visits the family as often as she can, but her own mother is becoming seriously ill, too.
Although Thornton has tried to get his mother to like and visit the Hales, there is no love lost between them. Mrs. Thornton sees Margaret as haughty, and feels exceptionally possessive toward her son. When a mob of striking workers threaten violence on Thornton and his factory--he has brought in cheap Irish workers to break the strike--Margaret encourages him to go down and appease the mob. He does so, and is in great danger. Realizing this, she puts herself between Thornton and the mob and is struck down by a hurled stone. Soldiers arrive and the mob disperses. While carrying Margaret indoors, Thornton realizes that he has fallen in love with her.
After his mother convinces him that Margaret cares for him, Thornton asks her to marry him. She declines, insisting that she would have intervened to save any man threatened by a mob. When Mrs. Thornton learns that her son has been rejected by Margaret, she hates her all the more. But when the dying Mrs. Hale asks Mrs. Thornton to look after Margaret, she promises to intervene if Margaret is about to make a mistake.
Margaret’s brother, Frederick, who is wanted for his part in a morally justifiable naval mutiny, secretly visits their dying mother. When Margaret takes him to the train station on his return to London, Thornton sees them and supposes Frederick to be Margaret’s lover. On the train platform, a man called Leonards recognizes Frederick. Leonards served with Frederick but did not mutiny and now wants to hand Frederick in to get a reward. Frederick pushes Leonards over the platform a few feet onto the tracks, then jumps into the train. Leonards dies shortly after. When Margaret is questioned by the police about the scuffle on the platform, she lies, saying she wasn’t there. As the magistrate overseeing the investigation into Leonards's death, Thornton knows of Margaret’s lie but covers up for her. Margaret begins to realize she has feelings towards him.

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