While at home, newlywed Jeff Baker tinkers with the piano and reveals an untapped musical talent. At the Baker family firm, however, he can't seem to do anything right. He fires one of his best associates, Phil Banner, and implements unrealistic schemes. Grace Baker tries to get Penny to persuade Jeff to resign from the company.
By July 4, the stress of Jeff's bad work situation gets to him. After overhearing associates Phil Banner and Ed Richardson discuss Grace's intention to make him a mere figurehead at the company, Jeff starts drinking. One day, Jeff lashes out at his mother, who in turn accuses Penny of not being straight with him about his work situation.
Jeff soon runs away from home and stays in a neighboring town under the alias of Jack Bailey. Meanwhile, Penny becomes pregnant with Jeff baby, but loses the baby around Christmas following a bout with pneumonia.
Louise Cole finally agrees to give her estranged husband, Tim, a divorce. But just when Tim and Ellen can finally get together and enjoy some happiness, he falls ill with terminal leukemia. Ellen marries Tim, but she soon becomes a young widow when Tim dies. Needing time to get over Tim's death, Ellen leaves Oakdale in late August. Ellen returns a little over a month later, and she soon gets a job as a nanny for the children of new arrivals David and Betty Stewart. Doug has just hired David as his new assistant.
By mid-May, college student Bob Hughes has met fellow student Lisa Miller from Rockville, Illinois. After a couple dates at the local malt shop, the two really fall for each other. However, it becomes clear in due time that Lisa has an added agenda; Bob is studying to be a doctor, and that means lots of spending money and security for Lisa. Bob and Lisa go to Gary, Indiana and elope in August.
The newlyweds soon move in with Chris and Nancy, especially after Lisa reveals that she is pregnant.
Edith Hughes marries Dr. George Frye, and the newlyweds leave for Seattle.
Claire and Doug's marriage faces a test, not only from the presence of Doug's new receptionist, but also due to his work schedule.