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Mr. Tulliver, upon losing the lawsuit against Wakem, remains optimistic. He would ask Furley, who held the mortgage on the mill and house, to buy the property and keep the Tullivers on as tenants. Tulliver had signed away the family's furniture as collateral on the loan of five hundred pounds from a client of Wakem's, but he lets Mrs. Tulliver ask the Pullets to buy up the loan, so they could keep their furniture. Tulliver dispatches a note to Maggie's school asking her to return home, as he wants her by his side. Then Tulliver goes home to Mrs. Tulliver, who still does not know the full extent of their trouble, and angrily tells her not to worry.
The next day Tulliver rides downtown to see Gore, his lawyer, about asking Furley to take buy the mill and keep Tulliver on as miller. On his way to the office, a clerk delivers him a note from Gore. Tulliver reads the note on the way home. It explains that Furley has already transferred the mortgage to Wakem. Mr. Tulliver has been found lying hear his horse, insensible.
When Maggie arrives home, Tulliver is vaguely conscious and has lost some memory. He seems anxious about the letter and to have Maggie near him. Mrs. Tulliver sends for her sisters, who gather downstairs and deem Mr. Tulliver's bad luck as fate and judgment upon him. Maggie and Mrs. Tulliver agree that Maggie should fetch Tom from school. On the carriage ride home, Tom expresses hatred toward Mr. Wakem, whom Tom is convinced has been planning to ruin their father.
Maggie and Tom return to their house to find a stranger smoking in the parlor. Maggie does not know who he is, but Tom understands that he must be the bailiff and feels pained and ashamed. Maggie checks on her father, and then they go in search of their mother, whom they find in the store room in the attic, crying over her best goods. Mrs. Tulliver is despondent that all her goods shall be sold and is dramatically pessimistic about their future: "we shall be beggars we must to the workhouse." Mrs. Tulliver explicitly blames Mr. Tulliver for their troubles, and Tom, too, begins to feel reproachful toward him for the first time. Maggie is angry at the atmosphere of bitterness toward her father, as well as the implication that she is shut out from Tom and Mrs. Tulliver's grief. Maggie reproaches them both and returns to her father. Tom becomes annoyed with her but softens upon seeing her at their father's bedside.
Mr. and Mrs. Glegg, Mrs. Deane, and Mr. and Mrs. Pullet gather at the Tullivers'. The narrator remarks on the rising fortunes of Mr. and Mrs. Deane, one of many sources of ill will and quarreling among the Dodson sisters this morning. Mrs. Tulliver beseeches the sisters to buy up her good china and linens, though Mrs. Deane and Mrs. Pullet will buy only the few items they want for themselves. Mr. and Mrs. Glegg encourage Mrs. Tulliver to concentrate on the necessities, such as beds, instead of luxuries.
The Dodson sisters look for Tom and Maggie to be brought in the room so they can be humbled by the sisters' charity. The aunts and uncles allude to Tom and of all the money spent on his education and warn the children that they must work and bear the brunt of their father's "misconduct." Tom quiets Maggie's temper and respectfully proposes that they pay Mr. Tulliver's debt of five hundred pounds—with the interest to be paid by Tom himself—and save the Tulliver family some disgrace along with their furniture. Mrs. Glegg contends that the Tulliver debts extend far beyond five hundred pounds, making it futile to relieve even that debt. Maggie loses her temper and warns the aunts and uncles to keep away from the house if they don't mean to help at all. The aunts take this outburst as confirmation of their past predictions that Maggie will come to no good.
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