The narrative begins with the auction by the US Government of fictional Spencer Island, located 460 miles off the California coast (32°15′N 145°18′W). The island is uninhabited and there are only two bidders, William W. Kolderup, a very wealthy San Franciscan, and his arch-rival J. R. Taskinar, a resident of Stockton, California. Kolderup wins the auction, buying Spencer Island for four million dollars. J. R. Taskinar mutters, "I will be avenged!" before retiring to his hotel.
Godfrey, an idle twenty-two-year-old, lives with Kolderup, his uncle, and Kolderup's adopted goddaughter, Phina, whom Godfrey has grown to love. Prior to marrying Phina, Godfrey asks to undertake a world tour. Acceding to his desire, his uncle sends Godfrey on a sea voyage around the world on board one of his steamships, the Dream, commanded by Captain Turcott. Godfrey is accompanied by his mentor, teacher, and dance instructor, Professor T. Artelett aka "Tartlet".