A month has passed for David at Salem House when, one evening, Mr. Mell informs David that Mr. Creakle, the man who runs the school, has arrived. Sure enough, before bed time that evening, David is summoned to appear before Mr. Creakle. Tungay, the wooden legged Salem House superintendent, does the honor of directing David to Mr. Creakle.
David sees that Mr. Creakle’s rooms at Salem House are considerably more comfortable and attractive than the rest of the establishment. Mr. Creakle himself is a bald, stout man who has a peculiar habit of speaking in a whisper. Presently, he ascertains David and asks Tungay if David has caused any trouble hitherto. Tungay replies not yet. Informing David that he is a Tartar in matters of discipline and regimen and that he is a good friend of David’s father-in-law Mr. Murdstone, Mr. Creakle dismisses the boy. However, before he leaves, David hazards a request: He wonders if he may remove the placard, with the written warning that he—David—bites, before the boys arrive. At this, Mr. Creakle rises and lunges at David, causing David to run for his life to his room. There he falls asleep.
Next morning, David is told by Tommy Traddles, the first boy to arrive from summer vacation, that the delicate man with the limp and stylish hair is Mr. Sharp, the first master of Salem, and that Mr. Sharp’s hair is actually a wig. Then David meets the rest of the boys, and though there is teasing on account of his placard, by and large the experience is not as half as bad as David had anticipated. Eventually, David meets J. Steerforth, the most respected boy in all of Salem House. When Steerforth learns of the circumstance that led to David’s placard, he pities David and leaves it at that for which David is grateful. By and by, Steerforth invites David to a night of drinking and snacking with the fellows. He also offers to be David’s banker. David gladly accepts the invitation, and though he is a little apprehensive about giving his money to Steerforth for safekeeping, he trusts Steerforth and agrees to do so,
That night, ensconced among the boys, David listens to what’s what at Salem House. Steerforth tells David that previous to running Salem House, Mr. Creakle, in partnership with Tungay, had been in the hops business in which he had failed miserably; that Mr. Creakle had stolen Mrs. Creakle’s money to start Salem House; and that Mr. Creakle had a son who had disapproved of his father’s treatment of the schoolboys and of his mother, for which he was banished from home. (As a result of the son’s banishment, Mrs. and Miss Creakle are in a perpetual state of sorrow.) Steerforth concludes, asserting that the dumbest of boys are smarter than Mr. Creakle; that the only thing Mr. Creakle knows how to do is administer a beating; and that if Mr. Creakle ever dared to raise his hand against Steerforth, Steerforth would knock Mr. Creakle insensible with an ink-bottle.
David learns from the other boys that the masters Mr. Mell and Mr. Sharp are paid miserably; that Miss Creakle is in love with Steerforth; and that Mr. Mell is a decent fellow but is terribly poor as is his mother Mrs. Mell who David had met a month ago in the London poorhouse.
As the boys fall asleep, Steerforth laments the fact that David doesn’t have a sister whom he—Steerforth—could love. Meanwhile, David’s admiration for the dynamic and handsome Steerforth is cemented for all time.