- Luke gets caught up in the Christmas spirit and wants to buy Kate a diamond ring that he can't afford. After he buys it, he tries to sell it to pay for Kate's hospital bill. Luke and Grandpa find out what Kate has for them on layaway.
- Kate McCoy, (Kathleen Nolan), puts some Christmas gifts on layaway with Mr. Schneider, (Steven Geray), the storeowner. Kate appears to be under the weather with coughing. Luke McCoy, (Richard Ctrenna), and Grandpa Amos McCoy, see the same storeowner and buy Kate a diamond ring for $75. Kate returns to the store and finds out that Luke and Grandpa bought her a diamond ring that they couldn't afford, and convinces Mr. Schneider to replace the diamond with a $10 Zircan. That way, she can pay for an electric blanket for Grandpa and an electric razor for Luke. Back at home, Grandpa and Luke convice Kate to have Dr. Talmadge, (Stanley Farrar), perform a house call for her. The Doctor drives her to the hospital that night for an overdue tonsillectomy to be performed the next day. The Doctor tells Grandpa and Luke not to worry about his bill just yet, but the hospital will need $60 right away. Luke and Grandpa pick up the "diamond ring" and try to pawn it but are offered 75 cents or as Grandpa confesses on Christmas Morning "6 bits". Luke and Grandpa return to the store and confront Mr. Schneider. He has to confess the whole sordid affair. Luke and Grandpa find out what Kate has on layaway for them, so they decide to respect her wishes, and leave it be, but they still need $60 to pay the hospital. Mr. Shneider comes to the rescue and peels off 3 $20 bills to pay for Kate's hospital bill for now, and worry about it later. Christmas morning, when Kate mentions that she has a savings plan that will pay out $65, she is excited to pay the hospital bill. Grandpa states that the hospital bill is paid and Kate suspects something is wrong and presses grandpa. The truth comes out, but Luke decides that they should use the extra money to upgrade the ring back to a diamond, but Kate says " It started out as a diamond but turned into something bigger." She keeps it as a reminder of the love behind it.
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