Nell goes back to her bedroom, shaken. The thought that her own grandfather robbed her is more terrible than a murderer or stranger doing it. She is repulsed by the idea that he might come back, thinking there is more money. Her imagination repeatedly torments her with visions of him sneaking into her room.
Nell doesn’t connect her affectionate grandfather with the greedy gambler that robbed her. She used to be saddened by his dull and quiet disposition, but now she has more reason to weep. She returns to his chamber to find him fast asleep. She realizes that they would be parted and her grandfather put away. She can be the only one that can help him. Nell returns to her chamber and falls asleep. The next morning, the servant girl wakes her. She checks to see if she has any money left, but she finds that all of it is gone.
She and the grandfather depart. He refuses to meet her eye. She tells him that she was robbed last night—though she would laugh if the money was taken as a joke. The grandfather says money is never taken as a joke, and those who take it intend to keep it. He asks if it was all taken, and she says yes. The grandfather orders her not to tell anyone, or there will be trouble. They must earn more to regain their wealth. He tells her not to cry—they will win it all back. Nell says she will never cry again if he forgets the matter.
Nell tries to persuade him that they were better off when they left all this behind. They had peaceful days and quiet nights. They have seen much in the beautiful journey they have had. Any exhaustion or hunger was alleviated. The grandfather refuses to listen, kisses her cheek, and tells her to hold her tongue.
Mrs. Jarley had been concerned about them and had stayed up. However, she assumed that they had stayed overnight somewhere and had went to bed. When they return, she is still asleep. Nell prepares for the day ahead. Mrs. Jarley is concerned that Miss Monflathers has failed to send any more pupils to the exhibit. She orders Nell to take handbills to them.
Nell meets Miss Monflathers as she takes her students out on a walk. Miss Monflathers tells her that she is a very wicked to be a waxwork girl. She lectures Nell how she should improve her mind and work hard to be happy. Nell is crying and drops her handkerchief. A sympathetic student named Miss Edwards picks it up for her. Miss Monflathers reprimands the student for her sympathy to the lower classes. She tells Miss Edwards that she has no right to flout the authority of her betters. If she cannot defer to them, she should leave the establishment. Miss Edwards is motherless and poor, only at the school as a charity case. Everyone considers her inferior. Miss Monflathers is vexed by her because she is the top student in beauty and intelligence. Meanwhile, the student from the most prestigious family is plain and stupid.
Miss Monflathers orders Miss Edwards back to her room. The woman is offended when her pupil passes by her with no salute. Miss Edwards turns around and curtseys. Miss Monflathers turns to Nell and orders her not to come here on behalf of her mistress anymore—or she will have Mrs. Jarley put in bonds.