Tracie Savage

Laura and Mary are nervous about their first day of school in Walnut Grove, but they are quickly put at ease by the genuine kindness of their new teacher and the majority of their classmates. Later, when their teacher invites the children's families to a special presentation in the classroom, Laura must come up with a plan when she realizes that she is not prepared.

When the mill closes due to bankruptcy, Charles loses out on two months’ worth of crucial wages that would have officially cleared his account at the mercantile. With a large bill left unpaid Charles takes on several odd jobs at once. Mary quits school temporarily to work overtime with seamstress Mrs. Whipple, while Laura does all the chores and assists Caroline with the crops.

Mary is excited to receive a pair of brand-new glasses, but her excitement fades when other students relentlessly tease her, even after Miss Beadle points out her own pair of glasses. Mary decides to "lose" her glasses, until Miss Beadle unwittingly shows her that she does not need to worry about her glasses making her look unattractive.

When Walnut Grove builds its very first bank, the cold and heartless Mr. Sprague settles in to run it. Charles tries to get on the man's good side right off the bat, but Mr. Sprague has been in the banking business long enough to sniff out these kinds of things, and after refusing to take the bait, he proceeds to turn Charles down flat when he requests an important loan.

Laura connects with a sweet, shy classmate named Olga Nordstrom, who happens to have been born with a short leg. Charles has an idea that can change Olga's entire life, but the challenge will be convincing the child's stubborn widowed father.

When a new boy named Johnny Johnson arrives at school for the first time, Laura is immediately smitten. Johnny is a friendly boy and although he is oblivious to Laura's crush on him, he certainly makes it clear that he is interested in Mary. Even though Mary does not share the same feelings, the "love triangle" is enough to cause tension between the sisters.