At the Sons of the Desert convention, a free-swinging affair in which booze flows freely and dancers entertain, the conventioneers have a wild time. One of the practical joke-loving, repulsively madcap members from Texas (Charley Chase as himself) sets up a gag at the entrance by placing a bill-filled wallet on the floor. Ollie, and then Stan (both as delegates representing California) bend down to pick it up, rewarded with a swat from a wide paddle on their behinds. One gag quickly follows another as Charley boasts, with a white carnation in his lapel:

California, aye...I'll bet you don't grow flowers out there that smell like this.

Ollie bends down to smell the flower for a closer look, getting a squirt of water up his nose. The irrepressible Charley chortles right in the face of the befuddled Ollie: "That's a darb, isn't it, boy?" The two are invited over to Charley's table for a drink of champagne. In the night-club atmosphere, a tenor (Ty Parvis) sings "Honolulu Baby" as a sexy lead hula dancer (Charita) entertains everyone, accompanied by an entire troupe of scantily-clad female dancers [filmed at one point Busby Berkeley-style from above]. Ollie is delighted with their "fast one" and how things have turned out: "You see, we're killing two birds with one stone. We're seeing as much here as we could have seen in Honolulu...What did I tell ya? We've been to the convention, had a swell time, going home in the morning, and nobody's getting the wiser."

The two boys' deception is almost revealed when Charley makes a long-distance phone call to their hometown of Los Angeles, using a disguised voice and speaking to "a sister...I haven't laid eyes on her since I got out of reform school." The phone call is taken by Mrs. Hardy, his sister! (Charley is Ollie's brother-in-law!)

Mrs. Hardy: All right, who is it?
Charley: It's your little brother Charley...I'm out in Chicago. They're throwing a convention for me.
Mrs. Hardy: Well, fancy hearing from you after all these years. You know Charley, I haven't seen you since you sang in the choir.
Charley: And you used to pump the organ, remember? You little organ pumper you!

Charley hands the phone over to Ollie, introducing his friend as a "swell guy" from Los Angeles. Ollie immediately tells his own wife: "I feel just like I know you." After he is invited to drop in and meet her husband when he returns to town, he does a complete double-take and gulps after hearing the address: "2222 Fairview Avenue." After Ollie quickly hangs up, Mrs. Hardy and Mrs. Laurel both wonder about the suspicious phone call and whether their husbands would lie:

Mrs. Hardy: If I didn't know Oliver was in Honolulu, I'd swear that was he on the phone.
Mrs. Laurel: Oh they're in Honolulu all right. Why Stanley wouldn't dare lie to me. I'd hate to think what would happen if he ever did.

As fate would have it, the Los Angeles Bulletin newspaper reports that the Honolulu cruise ship sinks: "HONOLULU LINER SINKING! FOUNDERING IN TYPHOON." "Passengers and Crew on S.S. Muana in Panic as Wireless Fails." The ship that the boys are thought to be on during their return from Hawaii to California sinks. All the passengers are rescued at the scene of the disaster by a sister ship and are on their way back to Los Angeles, due the next day at the harbor.

The grief-stricken wives who read the news are frantic. They rush down to the steamship company to await news of their husbands and the list of casualties:

Mrs. Hardy: Oh Betty, I do hope the boys are safe. Oh, the suspense is just killing me.
Mrs. Laurel: Have courage Lottie. Let's not think of the worst.
Mrs. Hardy: Well I try not to, but oh, I'm so worried about Oliver. You know how unselfish he always was. Why, he wouldn't leave that ship until everybody was saved.
Mrs. Laurel: Well if they're safe, Oliver certainly deserves a medal. You know Stanley can't swim a stroke.

In the meantime, the boys (each wearing plastic leis) have arrived home from the convention in a taxi. The cab driver comes around the back of the taxi to open the rear door, but Stan opens it into his path, knocking him to the ground. Then, Stan places his suitcase on the ground - the cabbie trips over it and goes sprawling again. Ollie offers the dazed man a small coin as a tip: "Here you are, old man, just keep the change." They both appear Hawaiianized - Stan carries pineapples, and Ollie has a ukelele. At their front doors, Ollie strums his ukelele, singing "Honolulu Baby" while Stan dances, but no-one is home at either residence to be greeted with evidence of their Hawaiian trip.

Inside, Stan picks up a newspaper to read news in a column called "Notes From the Clubs," and Ollie happens to notice the front-page headlines about the cruise ship disaster - horrified by its implications. All Stan can do is remark that it's a good thing they didn't go to Honolulu: "Can you beat that? I'm sure glad we didn't go." Panic-stricken, they gather up their things and rush to the door, but look out and see their wives getting out of a cab. The two have to take refuge by hiding in Ollie's attic. In the house, the two wives hear the noise of slamming doors, and then anxiety-ridden Mrs. Hardy gets a creepy feeling about their two husbands: "Oh, I have the strangest feeling. Oh, I feel as if they were hovering right over me."

Stan and Ollie decide that they must hide out and spend the night in exile in the attic. Ollie is confident that they won't be discovered:

Ollie: To catch a Hardy, they've got to get up very early in the morning.
Stan: What time?
Ollie: Oh, about half past - (he catches himself) - (scornfully) What time!

Ollie proposes that they fix up a bed to be comfortable for the night: "We'll fix ourselves a nice bed and be just as comfortable as two peas in a pod." He turns and slams his head into a wooden rafter beam. He creatively improvises by stringing up a box spring with rope and devising a make-shift hammock.

To relax and wait for the rescue ship to come home, to calm their nerves and to distract themselves from concern over their hapless husbands, the two wives go out to view a cinema newsreel - it contains a segment on the Chicago convention:

CHICAGO, ILL.
Dull care is left at home
by the "Sons of the
Desert" as they hold their
annual conclave.

Mrs. Hardy commiserates with Mrs. Laurel, feeling miserable about how cruel they were to prohibit their husbands from attending the convention and having a good time, and causing them instead to be involved in a shipwreck. Betty comforts Lottie: "Maybe they're not as bad off as we think." And then with wide-eyed disbelief, they find themselves watching footage of the convention's parade - viewing Stan and Ollie merrily skipping down the street with twirling parasols, acting deliriously happy and hogging the camera. The wives are shocked to learn that their husbands have deceived them. After storming out of the theatre and returning home, they agree to test their husbands against each other (once they get back home) to see which of them has the greatest integrity. They bet on which of their husbands is more honest and will voluntarily tell the truth.

Up in the attic, Stan congratulates Ollie, with uncharacteristically multi-syllabic words, for figuring out a way to further deceive their wives:

Stan: I've certainly got to hand it to you.
Ollie: For what?
Stan: Well, for the meticulous care with which you have executed your finely formulated machinations in extricating us from this devastating dilemma. (Ollie stares into the camera with an exasperated look)

A thunderstorm is raging outdoors, but Stan feels protected and secure:

Stan: We're just like two peas in a pot.
Ollie (correcting him): Not pot. Pod-duh. Pod-duh.
Stan: Pod-duh.

A lightning bolt from the storm strikes the rope holding up their improvised bed, sending it crashing to the floor. Mrs. Laurel investigates the noise, shotgun in hand, forcing them to flee onto the roof in the rain. A cowardly Stan turns "yellow" and wants to go down and confess all, but Oliver threatens blackmail: "If you go downstairs and spill the beans, I'll tell Betty that I caught you smoking a cigarette!" Stan is so fearful that he gives in: "All right. Go ahead and tell her. What do you think..(reconsidering) Would you tell her that?" And then he decides on another plan:

We'll climb down the garage and we'll change our clothes in the drainpipe; then, we'll go to a hotel and we'll be just as comfortable as two peas in a pod-duh!

They slide down the drainpipe from the roof - directly into a full rain barrel. Stan, ever helpful, tells Ollie to spread his legs so he won't get his feet wet, so Ollie ends up bottom-first in the water. The two are discovered and confronted by a policeman (Harry Bernard) who questions Stan, intimidating him to divulge their addresses: "I'm not kidding. If you don't believe me, go in and ask them." The cop insists that they have their identity checked with the occupants of the house, so they are brought to the front door, where Ollie delivers their trademark line:

Well, here's another nice mess you've gotten me into!

They are welcomed inside to tell their version (or alibi) of the story - a fantastic tale of an escape from a watery grave:

Ollie: We were sailing along in clear weather, when all of a sudden, a terrible storm came up. Didn't it, Stanley?
Stan: Yeah, and then we floundered in a typhoid!
Oliver: Not typhoid, he means typhoon, sugar. Then the ship started to sink, and we both dived overboard. Didn't we, Stan?
Stan: Yes, just as the boat was going down for the third time.
Oliver: And here we are.

Mrs. Hardy informs them that the rescue ship with the survivors aboard is not due until the next day. They cross-examine the men as if they are naughty children caught in a lie. They must explain how they came in ahead of the rescue boat by ship-hiking:

Stan: It must have got there after we left.
Ollie: That's right. It must have gotten there after we left. Thank you, Stanley.
Stan: You're welcome.
Mrs. Hardy: Well then, how did you get here?
Stan: Oh, we ship-hiked.
Ollie: That's right. We, we ship-hiked.
Mrs. Hardy: Ship-hiked?
Ollie: Yes. We thumbed our way.
Mrs. Hardy: What do you mean, thumbed your way?
Ollie: Well, Stan and I would be swimming along. We'd see a boat coming our way. We'd go like that (gesturing) and they'd pick up us. Wouldn't they, Stanley?
Stan: Yeah. Of course, that's if they were going our way, mind you.
Mrs. Hardy: Now you see, Betty. He's no different from the rest. They're both like two peas in a pod.
Stan (correcting): Pod-duh.

As the final part of the test to determine their honesty, Mrs. Hardy asks Ollie if his "fabricated" story is true, prefacing the question:

Mrs. Hardy: Oliver, I want you to be big. Bigger than you've ever been before. Are you telling me the truth?
Ollie: What do you mean, am I telling you the truth? Do you think that a story like that could come from my mind, if it wasn't the truth? Why it's ridiculous, it's absurd.
Stan: It's the silliest thing I ever heard of.
Ollie: It certainly is. Why, it's too farfetched up not to be the truth. Isn't it, Stanley?
Stan (affirming): It's imposterous!

Then, Mrs. Laurel coos at Stan and asks the same question. In a memorable moment, there is a long pause during the questioning, with a closeup of Stan's face. Suddenly, he tearfully pours out his confession, while Ollie observes as he rests his head on his hand at the table:

Mrs. Laurel: Honest confession is good for the soul. Is Oliver telling the truth? (pause)
Ollie: Go ahead and tell her.
Mrs. Laurel: Is he?
Stan (tearfully whimpering): No...

Truth-teller Stan is taken home to be alone with his wife in his house. With her arms crossed, Mrs. Hardy stands towering over her deceitful husband. Ollie attempts to look as innocent as possible (playing with his fingers on the table, making baby noises with a glass, twiddling his hat). Ollie asks glowingly: "How about you and me goin' to the mountains?" His wife runs into the kitchen to collect kitchen pots and pans from the cupboard to hurl at him. Noticing the impending confrontation as she stacks dishes up on the counter, Ollie innocently asks: "You're not movin' out tonight, are you, sugar? Why don't you wait until tomorrow morning so we can talk it over?"

The two are given different punishments. Next door after coming clean, Stan is seen lying on the couch on plumped up pillows. He is eating chocolates and scratching his head - not really knowing why he is being treated so well. Betty fixes him a drink and then snuggles next to him, reassuring him: "See Stanley. Honesty is the best policy." Because he has confessed truthfully, she has rewarded him. Stan is bothered by the noise of his neighbor's ensuing battle next door, with tremendous shaking, crashing, and cries of pain. Justice is being properly administered to ollie who has invented a cover story. A black-eyed Ollie covers his head with a pot, armoring himself against every other pot and piece of dishware in the house.

Stan goes next door and rings the doorbell to visit Ollie, where they exchange what their wives each told them:

Stan: What did she say?
Ollie: Never mind what she said. What did Betty say?
Stan: Betty said that 'Honesty was the best politics.' (He holds up a cigarette) Look!

Stan puffs on a once-forbidden cigarette, and then goes out the door singing: "Honolulu Baby." Ollie vengefully hurls a pot at his head, upending him.