Noggs enters the office and sees Ralph rereading Nicholas’ letter. Mr. Mantalini strolls in before Noggs can inform Ralph of his visit. Mr. Mantalini wants some money. Ralph agrees to do it for twenty-five pounds. Mr. Mantalini eventually agrees. Mrs. Mantalini shows up, and Mr. Mantalini quickly puts the bills in his pocket.
She tells her husband that she is ashamed of him. Mrs. Mantalini vows she will not be ruined by his extravagance again. She is not going to be considerate of his feelings when he shows no interest in hers. She accuses her husband of stealing some papers out of her desk.
She is now obligated to pay Miss Knag as a partner. She knows her husband took the papers to convert them into money. She decides she is going to put him on an allowance. Mr. Mantalini laments his fate. He threatens to drown himself, though he can’t be angry with his lovely wife. She will make a beautiful widow. Mrs. Mantalini gets upset by this talk. After she cries a bit, he agrees not to commit suicide. However, he refuses to live on an allowance. She agrees to postpone the decision. Ralph watches this scene scornfully, thinking how blind love only puts money in his pocket.
Mr. Mantalini brings up Mr. Mulberry Hawk. Ralph claims he saw the paper’s accounts of the incident. Hawk was thrown from a carriage and severely injured. His condition is considered critical.
Mr. Mantalini sees Noggs skulking nearby and knows this is a hint that it is time for him to leave. He tells Ralph it was not an accident. Ralph’s nephew tried to kill Mulberry Hawk. Mr. Pyke told him so. Nicholas walked away from the quarrel, which was over his sister.
After the Mantalinis leave, Mr. Squeers pays Ralph a visit. He introduces his son, praising his healthy plumpness. Ralph politely inquires after Mrs. Squeers. Mr. Squeers says she operated on one of their boys after he developed an abscess from eating too much.
Squeers has just recovered from his own injuries, which have been painful. It ran up quite a medical bill, but he paid it. It didn’t come out of his pocket. Whenever one of the Squeers needs medical attention, they expose the boys who have paying parents to some ailment like scarlet fever. They add their own medical expenses to the boys’ bills, and the parents pay for it.
Squeers is there about a charge of neglect. When the children won’t eat what is offered at the school, the Squeers let them graze in a neighbor’s garden. One child became ill and a law suit resulted from it.
Ralph assumes Squeers wants compensation for the injuries Nichoals inflicted upon him. He asks Squeers about the boy that Nicholas took with him.
Squeers says that the boy is around twenty years of age, but he wasn’t very bright. He was brought to the school by a stranger when he was five or six years old. The man paid the first quarter in advance. He continued to pay for six to eight years. Squeers didn’t know anything about the boy or the man. When the man stopped paying, Squeers followed up the address the man had given him. It didn’t give him any leads into the man’s identity. He kept the boy out of charity. Just when the boy became usefrul, he ran away with Nicholas. What is distressing now is that someone has been asking about him, and Squeers cannot profit in restoring him to the interested party.
Ralph tells Squeers that he’ll have his revenge on Nicholas, but he needs to figure out a plan.
Squeers boasts to Noggs that his son is fatter than twenty boys. Noggs says that is probably because he eats the food of twenty boys. Squeers is offended, but he decides that Noggs is a madman and a drunk.
Ralph is upset that Kate will be taught to despise him, and all by her arrogant brother who defied him from the start. If he could find a quiet, hidden way to exact revenge, he’d do it.
He recalls how people used to favor his brother for his honesty and generous nature. Ralph was considered crafty, cold, and greedy. He tears up Nicholas’ letter. People despise him because of his power, but he’ll show them what power can do.