The richness of the Treasure Valley, high in the mountains of Stiria or Styria, southeastern Austria, is lost through the evil of the owners, the two elder, "Black Brothers," Hans and Schwartz, who in their foolishness mistreat Southwest Wind, Esquire, who in turn floods their valley, washing away their "liquid assets," and turning their valley into a dead valley of red sand.
This personified wind has the power to keep things this way through his influence with other winds that had caused the valley's unique fertility. Forced into a trade other than farming Hans and Schwartz become goldsmiths. They cruelly melt their younger brother Gluck's prize heirloom, a golden mug, which consists of the head of a golden bearded man. This action releases the King of the Golden River for Gluck to pour out of the crucible as a finely dressed little golden dwarf. The Golden River is one of the high mountain cataracts, that surround the Treasure Valley. Gluck fancies that it would be good if that high majestic river would actually be what it appears in the setting sun, a river of gold. The dwarfish king disagrees with Gluck, but offers a proposition: if someone were to climb up to the source of the river and throw into it at least three drops of "holy water," it would become for that person only a river of gold. That person must do it on his first and only attempt or be overwhelmed by the river to become a black stone.
Hans and Schwartz desire to take the challenge, duel each other with the result that Schwartz is thrown into jail for disturbing the peace. Hans, who had the good sense to hide from the constable, steals holy water from the church and climbs up the mountains to the Golden River. He has a hard time of it on a glacier and gets away without his provisions and only his flask of holy water. Overcome with thirst Hans is forced to drink from this flask, knowing that only three drops are all that's needed. Along the path, Hans comes across three prostrate individuals dying of thirst, a puppy, a fair child, and an old man. Hans satisfies his own thirst while denying the three needy individuals.
The "demeanor" of the surroundings of his journey turns bleak and inauspicious, climaxing in Hans being transformed into a black stone once he has hurled the holy water flask into the Golden River. Gluck secures the release of his brother Schwartz, who, buying his holy water from a "bad priest," eventually fares likewise, spurning in his turn the fair child, the old man, and his brother Hans lying prostrate in his path. The Golden River then acquires another black stone around which to rush and wail.
Gluck takes a turn at climbing the mountain. He encounters first an old man walking down the mountain trail who begs water from the flask. Gluck allows him to drink, leaving only a third of the holy water. He then encounters a fair child, lying by the road, whom he allows to drink all but a few drops. Following these unselfish acts, Gluck's path is made bright and pleasant making him feel better than he had in his whole life—no doubt, due to his kindness. He then comes across the prostrate puppy, whom he gives the final drops of the holy water. The puppy turns into the King of the Golden River, who tells Gluck the fate of his two brothers and, thereupon, shakes three drops of dew from a lily into Gluck's flask to throw into the river. Gluck does this, and the Golden River forms a whirlpool where it travels underground and emerges in the Treasure Valley, which then becomes lush and fertile once more. Gluck the new owner is a wealthy man, who never turns away the needy from his door. Ever afterward, though, the people show and tell travelers the tale of the two black stones in the Golden River, known as The Black Brothers.