"Freetown" is the imaginary fantasy town of Ernie Morrison. After he stumbles into the cellar hideout of the Jesse James Juniors, Ernie weaves the story about how an escaped criminal kidnapped Mary Jane and held her for a ransom of $10,000. With the aide of Dinah The Mule, Ernie and Jackie Condon discover the criminal's hide-out and rescue the girl. Her father rewards the boys with the ransom he was going to give the kidnapper. Ernie goes on to claim he used the money to build Freetown, a kiddie paradise with a carnival atmosphere, where everything is free for the asking. Ernie is the mayor and Jackie is the Chief of Police, although a sign says the latter's name is Mickey.