Peekay arrives at the Johannesburg train station and meets one of his classmates, Morrie Levy, who introduces himself as the "token Jew." Morrie expresses surprise at Peekay's unusual name and his lack of a surname. At the first opportunity, Peekay reminisces about the farewell everyone gave him in Barberton-the prison brass band even played at the train station. He remembers how Captain Smit congratulated him on being "a proper Boer" and warned him not to let the "rooinek" school affect him. He recalls, too, his first train ride when Hoppie had retrieved him after he tripped over his tackies. He thinks of his most recent journey as his "second train ride into manhood." Sergeant Bolter meets the new boys at the train station-Peekay has to submit to a strict roll call. Sergeant Bolter, like Morrie, questions Peekay about his rare name.
Peekay immediately likes Morrie, and soon becomes friends with some of the other new boys, whose nicknames are Atherton, Pissy Johnson, and Cunning- Spider. (Later in the chapter, Morrie initiates a brotherhood called "the Wooden Spoon Goons" whose members are these five boys.) They are driven in the school's "charabanc" past the "perfectly manicured lawns" of Johannesburg and Peekay senses that he is entering a phase of his life where money is going to be not only important, but necessary. Morrie seats himself beside Peekay during the journey and discourses to Peekay on this version of "survival." He has decided that both he and Peekay are outsiders-"odd-bods"-and should stick together. Peekay is a little hesitant to accept Morrie's offer of friendship-he has come to the school on his own terms. He no longer wishes to hide his brilliance behind a camouflage-his boxing success is much more important to him than his academic success, however. After some reflection Peekay realizes that he possesses the "physical and intellectual equipment" needed to survive the school system, but he does not possess the material resources. In the charabanc ride, Morrie and Peekay discuss boxing and gambling. Morrie tells Peekay that the role boxing plays in Peekay's life is the same role that gambling plays in his own life. He tells Peekay that his father is "filthy rich." Peekay decides to become Morrie's "partner."
At school, Peekay becomes a "fag" (personal slave) to Fred Cooper, a prefect and the captain of the first rugby team. One day Peekay cannot resist sampling the cream on the cream bun he has to take to Cooper. Cooper notices the dents in the cream, canes Peekay, and orders him to buy him a new cream bun. Peekay has no money. Morrie offers to lend Peekay the money-he is shocked that Peekay receives no pocket money. Peekay's pride will not allow him to accept the money, however, and Morrie is forced to reform the cream bun until it looks new.
To his dismay, Peekay discovers that the Prince of Wales boxing team is a disaster. They possess the wooden spoon, which indicates that they occupy last spot in the ladder. Only twenty boys out of the school's six hundred students actually boxes, and only six of these twenty know how to box properly. Peekay assesses Darby White as a coach, and judges him to be as good as Lieutenant Smit but not as fine as Geel Piet. Morrie decides to become Peekay's manager, especially after hearing that he has won thirty-four matches and lost none. Morrie in fact becomes manager of the entire boxing team. Soprts management positions at the school are called "swot spots" and are normally reserved for fifth formers, but no one wants to take on the boxing team- especially since boxing is viewed as a predominantly Afrikaans sport.
Peekay's first fight for Prince of Wales School is against an Afrikaans school, Helpmekaar, whose boxing team is reported to be the best in South Africa. The gymnasium is filled with Helpmekaar supporters and only a trickle of Prince of Wales students. Morrie skirts around taking bets from people. Everyone bets against Peekay winning since his opponent, Jannie Geldenhuis, weighs ten pounds more than he does. In the ring, however, Peekay repeatedly knocks Geldenhuis down, closing the fight with Geel Piet's specialty-the eight-punch combination. The Helpmekaar coach thinks that Peekay must be an Afrikaner. Peekay tells him that he's English, and for the first time feels proud to be a "rooinek." Geldenhuis comes over to congratulate Peekay on the match, but Morrie tells Peekay not to mix with the opponent-he says you have to hate the opponent. He and Peekay have each a profit of five pounds from the betting. Peekay says that he noticed at the fight that a gathering of well-dressed black men stood and watched from the door and shouted "Onoshobishobi Ingelosi!" when Peekay won. Back at school, the black servants quietly begin to do his work for him, and they always bring the best food to his table. Peekay begins to realize that he is a born leader, but he admits that his need to lead has its source in the horror of his childhood.
Chapter Sixteen illustrates the new environment and relationships which Peekay has entered. The most important new character is Morrie Levy, the Jewish boy with whom Peekay forms a partnership. Morrie represents the beginning of Peekay's education-and independence-in an entirely new field: finance. For the first time in his life, Peekay is forced to confront the last remaining chasm between himself and those he sees around him at the Prince of Wales School- money. Even on the ride from the train station to the school, Peekay observes the affluence of the suburbs of Johannesburg.
Chapter Sixteen focuses more on Peekay's "Englishness" than any of the novel's other chapters. For the first time in his life, Peekay feels proud to call himself an Englishman, or "rooinek" (redneck). The fact that Prince of Wales School is a school for "English Christian gentlemen" reinforces this aspect of Peekay's identity. In such a way, he claims a small victory over his childhood terrorizers, such as the Judge had his "storm troopers", who indoctrinated Peekay to believe that the English were rascals. Peekay does not fall into their way of behaving, however-whereas Morrie claims that Peekay should "hate" his opponent, Peekay has no problem chatting to Jannie Geldenhuis after their boxing match.