Paul is eleven years old when his father decides to buy a stallion called Ghost Wind from a neighbor. Mister Edward's four sons ride over with him for the purchase, each on one of his finest horses. Paul, who loves horses and rides them well, rides slowly in order to keep Robert, who is terrified of horses, company. At the Waverly farm, Mr. Waverly, Mister Edward, George, and Hammond take Ghost Wind out to ride, but Robert, who is tired of riding, stays back at the barn. Paul stays with Robert.
Mr. Waverly's three sons bring out one of Mr. Waverly's new horses, an unbroken Appaloosa, daring Robert to ride it. Despite Robert's protests, the three sons throw him on the back of the skittish horse, which immediately begins to buck and snort. When Paul protests, the heedless boys throw Paul on the horse's back behind Robert. The horse begins to run, and Paul, sitting in back, cannot control him. Before they know it, the two boys are on the ground, with Robert holding his arm as if it is wounded. The three Waverly boys approach them ruefully, begging them not to mention the incident to their father. Out of nowhere, Robert vehemently asserts that Paul can ride the wild horse and presents the boys with a dare: if Paul can ride the horse without falling off, Paul can keep the horse. If the boys do not accept the terms of the bet, Robert will tell their father what happened.
Paul takes the horse out to the meadow, and after talking to it softly, leading it around, and feeding it apples, he mounts it and rides it successfully around the meadow—much to the boys' astonishment. When Mr. Waverly and the men return, Robert quickly tells them of the bet, and Mr. Waverly concedes that Paul has won the Appaloosa fairly. When Paul's father and Mr. Waverly go inside to discuss the sale of Ghost Wind, one of the Waverly boys calls Paul a "white nigger." George immediately pins him against the barn wall, and Hammond, trying to calm his brother, explains that Paul is their kin, and they take insult at anyone who disparages him.
Later, Mister Edward begins to train Ghost Wind for races, with the help of Paul, who is thrilled with the responsibility of training the magnificent horse. Mister Edward's trust in Paul is so deep that while he is out of town, he entrusts the horse to Paul. While proudly riding Ghost Wind around the meadow, Paul sees Mitchell eyeing him sullenly. Determined to win the boy's trust, Paul, certain that Mitchell will refuse, offers him the chance to ride Ghost Wind. When, to Paul's surprise, Mitchell mounts the horse, Ghost Wind bucks and races madly into the woods. When Paul finds them, Mitchell is on the ground, and Ghost Wind's leg is injured. The boys' hearts sink.
Back at the barn, Mitchell's father, Willie, to whom Mister Edward eventually entrusts the care of the beautiful stallion, slaps Mitchell fiercely when he sees the wounded horse. Certain that his son is responsible for the disaster and terrified that he might lose his job on the plantation, he prepares to whip Mitchell, but he stops when Mister Edward arrives. Willie is about to explain that Mitchell hurt the horse, when Paul speaks up and asserts that it was he who rode and injured the horse. His father, who knows that Paul is a superior horseman, looks at his son closely, but he lets the story pass. Back at the house, Mister Edward tells Paul that as a result of his decisions, he will never be allowed to ride Ghost Wind again. The next day, Paul tells Mitchell about his punishment, which he explains is much worse than a whipping. In an attempt to communicate to Paul how grateful he is, Mitchell tells Paul that Willie would have beat him "near to death" if he had thought Mitchell had hurt the horse. Paul, accepting his tacit gratitude, tells Mitchell that it was a good thing he had not been riding the horse. With this, the boys' esteem for each other deepens.
Taylor uses these opening chapters, which are independent vignettes from Paul's childhood, to establish Paul's frame of reference and to outline the early influences on his character. Paul lives in a world in which he expects his brothers to come to his defense against bigotry and his father to entrust him with the care of his prize racehorse. Paul also expects to win over people who dislike him by treating them with fairness and respect. Paul's world is predictable, logical, and fair, and these characteristics foreshadow his struggles with an adult society that is racist, capricious, and unjust.
The chapter centers on three dramatic incidents driven by honor, illustrating the importance of honorable conduct to southern society. First, the Waverly boys must give the Appaloosa to Paul because he won the bet they made with him. Even Mr. Waverly agrees—he posits that since the boys entered into an agreement, Paul deserves the horse. Secondly, George reacts violently when one of the Waverly boys calls Paul a "white nigger," and Hammond explains their code of honor: Paul is family, and what is said of him is said of their entire family. In the third honor-driven incident, Paul stands up for Mitchell much as his brothers stood up for him. To some extent, Paul's sacrifice is Christ-like: he stands in for Mitchell and bears his punishment instead of him, even though Paul's father knows that Mitchell was riding the horse when the injury occurred. At the same time, Paul's decision is a bit more ambiguous than this. He feels guilty for having offered the horse to Mitchell in the first place, he wants to win Mitchell's respect and friendship, and he knows that the punishment Mitchell would receive is perhaps harsher than his own—especially if Willie's job is threatened. Paul, who clearly understands his role in Mitchell's predicament, refuses the less honorable, but more attractive course of action, in which he allows Mitchell to be punished. After all, Mitchell, in a literal sense was responsible for the horse's injury. Paul's family and, to a lesser extent, his entire society, is motivated by this sense of honor—a person must keep spoken promises and bear the consequences of his or her statements, be they true or not.
Taylor characterizes Paul's father—through his words, actions, and interactions with Paul—as a somewhat distant but fair and honorable man. When Ghost Wind is wounded, he approaches the terrified Willie calmly, trying deliberately and carefully to get to the bottom of the problem. He metes out Paul's punishment just as serenely, letting the consequences of Paul's decision, rather than anger or a beating, serve as his punishment. At the same time, Paul refers to him respectfully as sir or Mister Edward, and his father's decision to ride his five finest horses to the Waverly's is both shrewd and proud. Mister Edward comes across as trustworthy but also worthy of fear and awe. His sense of justice is true but unbending.
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