In the customs office, star reporter Lawry witnesses what appears to be the apprehension of a man smuggling lacy handkerchiefs into the country. Huh? How dangerous can a lacy handkerchief be? It's not the danger, but the principle of the thing, and it's right up the alley to perk the interest of Brit Reed.
When the reporter for the Daily Sentenal learns the man is a diplomat, and is hiding behind his immunity, he takes the story of injustice to his boss, Brit Reed. Can the diplomat be punished at all? Does his outrageous protests, and claims that he can retaliate against the authorities have any weight? Who is the big loser in such tame contraband as lacy handkerchiefs?
Ambassador Sneed may be above the law, but the people he's dealing with to deliver the goods aren't, and it's all the Green Hornet needs to go on to spring into action. Using the footwork of the Sentenal reporters to find the trail of contacts a plan is formed. Hiding in the shadows, and revealing himself only enough to entice the cops and put a scare into the bad guys, the Green Hornet begins laying out his trap.
Can it be proved the lace handkerchiefs in the truck are smuggled goods? With a little help from the Green Hornet, the cops capture the shipment, break up the smuggling ring, and cause an embarrassment for the diplomat.