Forced by a shortage of wood and fresh water, the "Chiku Shan" pulls into the Graveyard of Ships at Honghai Bay. Captain Wilder orders the wrecks stripped of wood for fuel and water siphoned from depressions and tanks for the boiler and for drinking. A heavy timber plows through the stern wheel while mooring the steamboat, snapping one of its paddle blades. This forces Wilder to stay in the Graveyard longer than he had planned in order to repair it. At the same time, Cathy goes ashore and returns after learning that Wilder had told her the truth about her father's death. The Fengs are put off, only to be taken back aboard when the pursuing Red Chinese destroyer shells the Graveyard and sends its powered boats in search of the ferry. The "Chiku Shan" makes a run into a marshy estuary and disappears.