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The story is set in an imaginary American town that has gone bankrupt.
The only place in town doing good business is the local sanitarium, known as “ The Cookie Jar ,” whose inmates look much healthier than the disgruntled townspeople.
(" I'm Like the Bluebird ") All the money is in the hands of Cora Hoover Hooper, the stylish, ruthless mayoress and her cronies-Comptroller Schub, Treasurer Cooley, and Police Chief Magruder.
Cora appears carried in a litter by her backup singers, and admits that she can accept anything except unpopularity (“ Me and My Town ”).
The scheming Comptroller Schub, tells her that he has a plan to save her administration, and the town, promising “ It's highly unethical .” He tells her to meet him at the rock on the edge of town.
At the rock, a local mother, Mrs. Schroeder, tries to tell her child, Baby Joan, to come down from the rock, when Baby Joan licks it-and a spring of water begins flowing from it.
The town instantly proclaims a miracle, and Cora and her council eagerly anticipate tourist dollars as they boast of the water's curative powers.
(" Miracle Song ") It is soon revealed to Cora that the miracle is a fake, controlled by a pump inside the rock.
The only person in town who doubts the miracle is Fay Apple, an eternally skeptical young nurse from the Cookie Jar who refuses to believe in miracles.
She appears at the rock with all forty-nine of the inmates, or “ Cookies ” in tow, intending to let them take some of the water.
Schub realizes that if they drink the water and do not change, people will discover the fake.
As he tries to stop Fay, the inmates mingle with the townspeople, until no one can guess who is who.
Fay disappears, and hiding from the police, admits that she hopes for one miracle-for a hero who can come and deliver the town from the madness (“ There Won't Be Trumpets ”).
Cora arrives on the scene with the Cookie Jar's manager, Dr. Detmold, but he says that Fay has taken the records to identify the inmates.
He tells Cora that he is expecting a new assistant who might help them.
At that moment a mysterious stranger, J. Bowden Hapgood, arrives asking for directions to the Cookie Jar.
He is instantly taken for the new assistant.
Asked to identify the missing Cookies, Hapgood begins questioning random people and sorting them into two groups, group A, and group one, but refuses to divulge which group is which.
The town council becomes suspicious of this and try to force the truth out, but Hapgood questions them until they begin to doubt their own sanity.
Cora is too caught up with his logic to care.
(“ Simple ”) As the extended musical sequence ends, the lights black out except for a spotlight on Hapgood, who announces to the audience, “ You are all mad !” Seconds later, the stage lights are restored.
The stage set has vanished, and the cast is revealed in theater seats, holding programs, applauding the audience.

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