The Caucasian Chalk Circle begins with a Prologue that deals with a dispute over a valley. Two groups of peasants want to claim a valley that was abandoned during WW II when the Germans invaded. One group used to live in the valley and herded goats there. The other group is from a neighboring valley and hopes to plant fruit trees. A Delegate has been sent to arbitrate the dispute. The fruit growers explain that they have elaborate plans to irrigate the valley and produce a tremendous amount of food. The goat-herders claim the land based on the fact that they have always lived there. In the end, the fruit farmers get the valley because they will use the land better. The peasants then hold a small party and a Singer agrees to tell them the story of the Chalk Circle.
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The Caucasian Chalk Circle is actually two stories that come together at the end. The first story is that of Grusha and the second story is that of Azdak. Both stories begin in a Caucasian City ruled by a Governor, who serves a Grand Duke. The Governor has just had a child, Michael, and his wife Natella is incredibly jealous of the attention that he gives to his son. The Governor's brother, the Fat Prince, stages an insurrection on Easter Sunday. He kills the Governor and forces the Governor's wife to flee. In her haste, she leaves behind her child. The Grand Duke and many of the soldiers flee as well.
Grusha, a kitchen maid, becomes engaged to a soldier named Simon. Soon thereafter, during the coup, she has Michael handed to her. She hides the child from the Fat Prince and his soldiers, thereby saving the child's life. She then takes Michael with her and flees the city, heading north. After spending most of her money and risking her life for the child, she arrives at her brother's house. He allows her to live there over the winter.
When spring arrives, Grusha's brother forces her to marry a "dying" man from across the mountain. They hold a