On the coast of Cornwall, at the time of Queen Victoria's reign, Frederic, a young man with a strong sense of duty, celebrates, amidst the pirates, the completion of his twenty-first year and the apparent end of his apprenticeship ("Pour, oh pour the pirate sherry"). The pirates' maid of all work, Ruth, appears and reveals that, as Frederic's nursemaid long ago ("When Frederic was a little lad"), she had made a mistake "through being hard of hearing": she had misheard Frederic's father's instructions and apprenticed him to a pirate, instead of to a ship's pilot.
Frederic meets Mabel ("All is prepared"), and she pleads with him to stay ("Stay Frederic, stay"), but he explains that he must fulfill his duty to the pirates until his 21st birthday in 1940. He promises to return then and claim her. They agree to be faithful to each other until then, though to Mabel "It seems so long" ("Oh here is love and here is truth"), and Frederic departs. Mabel steels herself ("No, I'll be brave") and tells the police that they must go alone to face the pirates. They muse that an outlaw might be just like any other man, and it is a shame to deprive him of "that liberty which is so dear to all" ("When a felon's not engaged in his employment"). The police hide on hearing the approach of the pirates ("A rollicking band of pirates we"), who have stolen onto the grounds, meaning to avenge themselves for the Major General's lie ("With cat-like tread").. Will Frederic and Mabel ever be reunited?