On their way to find Sissy’s father, Gradgrind and Bounderby walk through the dark, smoky streets of Coketown, passing a number of identically shaped buildings made from identical dirty red bricks. Soon they meet Sissy Jupe herself, who is being chased by the bullying Bitzer. Sissy, a dutiful and loving daughter, has been out buying oils for her father’s aches and pains. The two men follow her back to the dwelling place of the circus performers.

Sissy stops at an inn called the Pegasus Arms, where Bounderby and Gradgrind are introduced to the lisping circus master, Mr. Sleary. Sleary informs Gradgrind that, unbeknownst to Sissy, her father has lost his ability as a performer and has abandoned her in shame. Gradgrind decides to take Sissy into his home and raise her according to his philosophy of fact. Sissy agrees to the arrangement, principally because she believes her father will come back for her—an idea that Bounderby and Gradgrind find fanciful and ridiculous. A strange assortment of circus folk gathers to wish Sissy well in her new home. She is sorry to leave them, because these entertainers have been like a family to Sissy during her childhood.

The next day, Bounderby discusses Louisa with his housekeeper, Mrs. Sparsit, who is connected to the prominent aristocratic Powler family. After falling on hard times, the aristocratic Mrs. Sparsit has accepted employment with Mr. Bounderby, but she constantly reminds him of her family connections. Bounderby worries that the fanciful Sissy will be a bad influence on Louisa, whom he already regards as his future wife. Gradgrind informs Sissy that she may continue to attend his school and that she will care for Mrs. Gradgrind in her free time.

Later that same day, Louisa talks with her brother about her father’s plan to apprentice Tom at Mr. Bounderby’s bank. Both Louisa and Tom are depressed by the colorless monotony of life at Stone Lodge, but Louisa, attempting to cheer up Tom, reminds him of her affection for him. She seems to feel that something is missing from her life, but when she wonders what it might be, Mrs. Gradgrind warns Louisa never to wonder—wondering contradicts the philosophy of fact, and it also makes Mrs. Gradgrind wish she had never been cursed with a family.

In Dickens’s novels, characters’ names often reveal details about their personalities. For instance, Mr. Gradgrind’s name evokes the monotonous grind of his children’s lives, as well as the grinding of the factory machines. Similarly, the title of each chapter in Hard Times can be helpful in interpreting the movement of the plot. For example, the first chapter is titled “The One Thing Necessary,” and in this chapter we learn that Mr. Gradgrind believes the one thing necessary for a fulfilling existence is fact. The meaning of the title of Chapter 5, “The Key-note,” is not so immediately obvious. However, its meaning is clarified at the beginning of Chapter 8, when the narrator declares, “Let us strike the key-note again before pursuing the tune.” He then describes how, as a child, Louisa was inclined to wonder about the world around her, to ask questions, and to imagine. Not surprisingly, her father quickly suppressed this inclination, telling Louisa that she must “never wonder.” In Chapter 5, the narrator also draws our attention to the need for wonder and imagination when he compares the Gradgrind children to factory workers. He explains that both the children and the workers “have Fancy in them demanding to be brought into healthy existence.” From these passages, we can conclude that the conflict between fact and fancy is the “key-note,” or the key theme, that the narrator will continue to bring up throughout the novel. Fancy, the narrator implies, is at least as important as fact in a balanced, fulfilling existence. Chapters 5 through 8 thus serve to reinforce the relationship between fact and fancy.

In this section, the circus entertainers are the most obvious representatives of fancy, and Gradgrind accordingly finds them rather distasteful. The entertainers possess the ability to transform the colorless, humdrum world into a place of magic and excitement simply by using their imaginations. This transformation is illustrated by Kidderminster, a gruff young boy who plays the role of Cupid in the circus. In real life, Kidderminster is cheeky, loud, and temperamental, but in the circus ring he is adorably sweet and wins the spectators’ hearts. Through fancy, the circus entertainers not only find happiness themselves, but also bring pleasure to others.

In Chapter 8, Dickens draws attention to another mode of fancy that brings pleasure to others: fiction, and in particular, novels. The narrator relates that, much to Mr. Gradgrind’s dismay, factory workers flock to the Coketown library “to read mere fables about men and women, more or less like themselves, and about children, more or less like their own.” The workers are drawn to these stories because they stimulate their imaginations, causing them to wonder about “human nature, human passions, human hopes and fears, the struggles, the triumphs and defeats . . . of common men and women.” Novels provide a much-needed escape from the drab, mechanical factories in which these workers spend most of their days. In describing the workers’ reading habits, Dickens draws attention to the fact that his own readers are in fact reading a novel about, more or less, ordinary men and women. Thus, he presents his novels as a way to counteract the dehumanizing effects of the Industrial Revolution. Significantly, the Coketown workers read what is known as realism, or fiction that attempts to represent real life accurately, and which often describes the lives of common people rather than those of kings, queens, and other aristocrats. In his focus on the common man and the social conditions of Victorian England, Dickens himself is a realist writer. In this passage, he reminds us that even realism is a form of fancy and that even realist novels can both teach us about real life and awaken our imaginations. The realist novel, he suggests, combines fact and fancy. In Victorian England, the novel was often considered a dangerous genre precisely because it was accessible to the working and middle classes. Many people feared that novels would corrupt the minds of these readers by making them too fanciful and even by giving them immoral ideas. By suggesting that realist novels can both teach and entertain, Dickens defends his novel against these charges.