Inside Howards End, Margaret does not ask Helen to explain her pregnancy; nor does she ask who the father is. She merely asks about Helen's situation--she is living in Munich with a journalist named Monica--and why Helen did not tell her what had happened. At first, they seem far apart from one another, and their conversation is awkward; but as they look at all the old furniture from Wickham Place arranged in Howards End, they realize how much they love one another, and agree to spend the night together in the house. Margaret goes back to Charles' house to ask Henry's permission. Shockingly, he denies it: He expresses his desire to thrash Helen's "seducer" "within an inch of his life," but despite his own extramarital affair, he refuses to let a fallen woman such as Helen spend a night in his house. Margaret furiously tries to show him his own hypocrisy, but he merely stalks away. Margaret returns to Helen at Howards End.
After Henry learned of Helen's condition, he called Charles to solicit his help; Charles immediately goes to see Tibby, whom he bullies into telling him the name of Leonard. Drawing the false conclusion that Tibby condoned an affair between Helen and Leonard, and offered his rooms as a place for them to conduct the affair, Charles leaves Tibby in disgust.
Outside, under the great wych-elm at Howards End, Helen tells Margaret the story of the night she slept with Leonard--the night of Evie's wedding, when she and Leonard talked in the hotel after Jacky had gone to sleep and the same night Margaret learned of Henry's affair with Jacky. Helen asks Margaret to come to Germany with her, and Margaret, though she loves England deeply, considers the idea. Suddenly imagining that she, Helen, Henry, and the placid countryside around are all part of the dead Mrs. Wilcox's mind, she wonders whether Leonard is part of that mind as well.
Henry's shockingly hypocritical reaction to Helen's pregnancy reveals his inner crisis; he is terribly unsure of how to act, so he simply does the most conventional thing imaginable at every turn. This behavior leads him into the horribly contradictory position of wishing to blame and punish Helen's seducer but refusing to let Helen spend a single night in his house. Here, Margaret's philosophy of "Only connect" and Henry's philosophy of "Concentrate" crash headlong into each other. Henry is concentrating so hard on ideas of social morality that he is unable to see that Helen is not guilty of anything he himself has not done. She is actually less guilty, as Margaret points out: Helen has only hurt herself, while Henry was unfaithful to Mrs. Wilcox.
When Margaret, enraged, points this out to Henry in terms that even he cannot fail to understand, he falls to pieces, snarling his refusal once more and then shambling away. As Forster points out in a narrative aside, Margaret's only hope of saving Henry lies in breaking him; as long as his outward edifice is secure, he will never learn to "connect." This scene in Chapter 38, though it does not complete the process of breaking Henry, certainly prepares him for the collapse he will experience after Charles is charged with manslaughter.
Helen's confession that Leonard is the father of her unborn child serves to further entwine the fates of the three main groups of the novel--it is clear that the question of "Who will inherit England?" will not have a simple answer. Of the two Schlegel sisters, one has married a Wilcox and the other will bear the child of a Bast. The message is that the classes are mingling and the boundaries are becoming indistinct. Howards End, like England, can no longer belong to any one group, and soon, the groups themselves will cease to exist as separate classifications.