The golden, bejewelled statue of the Happy Princess stands above the wintery city. A Swallow, left behind during migration, shelters by her feet. The Princess tells the bird that now she is dead, just a statue, her work is forgotten. She longs to comfort her suffering people. On her instruction, the Swallow takes her jewels to give to some sweatshop workers, an impoverished school and a group of refugees, and with the city birds' help, flakes of gold for all. But the Swallow dies of cold and the Mayor decrees that the statue, now stripped of its finery, must be melted down. In the embers, a child finds the Princess's leaden heart - broken, but not destroyed.
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