Silas suddenly appears in the middle of the tavern, his agitation giving him a strange, unearthly appearance. For a moment, everyone present, regardless of his stance in the previous argument about the supernatural, believes he is looking at a ghost. Silas, short of breath after his hurried walk to the inn, finally declares that he has been robbed. The landlord tells Jem Rodney, who is sitting nearest Silas, to seize him, as he is delirious. Hearing the name, Silas turns to Rodney and pleads with him to give his money back, telling him that he will give him a guinea and will not press charges. Rodney reacts angrily, saying that he will not be accused.

The tavern-goers make Silas take off his coat and sit down in a chair by the fire. Everyone calms down, and Silas tells the story of the robbery. The villagers become more sympathetic and believe Silas’s story, largely because he appears so crushed and pathetic. The landlord vouches for Jem Rodney, saying that he has been in the inn all evening. Silas apologizes to Rodney, and Mr. Dowlas, the farrier, asks how much money was lost. Silas tells him the exact figure, which is more than 270 pounds. Dowlas suggests that 270 pounds could be carried out easily, and he offers to visit Silas’s cottage to search for evidence, since Silas’s eyesight is poor and he might have missed something. Dowlas also offers to ask the constable to appoint him deputy-constable, which sets off an argument. Mr. Macey objects that no doctor can also be a constable and that Dowlas—whose duties as a farrier including the treatment of livestock diseases—is a sort of doctor. A compromise is reached wherein Dowlas agrees to act only in an unofficial capacity. Silas then leaves with Dowlas and the landlord to go to the constable’s office.

Godfrey returns home from the dance to find that Dunsey has not yet returned. Godfrey is distracted by thoughts of Nancy Lammeter, and does not think very much about his brother’s whereabouts. By morning, everyone is discussing the robbery, and Godfrey and other residents of the village visit Silas’s cottage to gather evidence and gossip. A tinder-box is found on the scene and is suspected to be somehow connected to the crime. Though a few villagers suspect that Silas is simply mad or possessed and has lied about the theft, others defend him. Some townspeople suspect that occult forces took the money, and consider clues such as the tinder-box useless.

The tinder-box reminds Mr. Snell, the tavern landlord, of a peddler who had visited Raveloe a month before and had mentioned that he was carrying a tinder-box. The talk among the townspeople turns to determining the peddler’s appearance, recalling his “evil looks” and trying to determine whether or not he wore earrings. Everyone is disappointed, however, when Silas says he remembers the peddler’s visit but never invited him inside his cottage. Godfrey, remembering the peddler as a “merry grinning fellow,” dismisses the stories about the peddler’s suspicious character. Silas, however, wanting to identify a specific culprit, clings to the notion of the peddler’s guilt.

Dunsey’s continuing absence distracts Godfrey from this discussion, and Godfrey worries that Dunsey may have run away with his horse. In an attempt to find out what has happened, Godfrey rides to the town where the hunt started and encounters Bryce, the young man who had agreed to buy Wildfire. Bryce is surprised to learn of Dunsey’s disappearance and tells Godfrey that Wildfire has been found dead. Seeing no alternative and hoping to free himself from Dunsey’s threats of blackmail, Godfrey decides to tell his father not only about the rent money but about his secret marriage as well. Godfrey steels himself for the worst, as Squire Cass is prone to violent fits of anger and rash decisions that he refuses to rescind, even when his anger has passed. The next morning, Godfrey decides to confess only partly and to try to direct his father’s anger toward Dunsey.

Silas’s incorporation into Raveloe begins in Chapter 7. His devastation at the loss of his money is evident, and it inspires sympathy in his audience at the tavern. When the news spreads, the village takes an immense interest, based partly on mere curiosity but also on some genuine concern. Whereas he was previously looked upon with a mixture of fear and contempt, Silas is now the object of real sympathy. The townspeople’s concern has an effect on Silas, even if at first he does not notice it. As Eliot notes, “Our consciousness rarely registers the beginning of a growth within us any more than without us: there have been many circulations of the sap before we detect the smallest sign of the bud.” Silas’s incipient bond with the rest of Raveloe is likened to a bud on a plant, a clearly hopeful and positive metaphor of rebirth.

This bond, however, is reinforced only through scapegoating another outsider, the peddler. The townspeople’s suspicion of the peddler and their conjectures about his earrings are laughable, but such behavior emphasizes the insularity of the village. The townspeople are deeply suspicious of strangers, especially those with dark skin and earrings who resemble gypsies. However, there is nonetheless some element of logic to these suspicions. As Jem Rodney points out, if a village resident stole the money, it would be quite difficult for him or her to spend it without attracting attention.

Eliot fleshes out Godfrey’s character in Chapter Eight, as Godfrey debates whether to come clean to his father. As Eliot writes earlier, Godfrey possesses plenty of “animal courage,” but is cursed with “natural irresolution and moral cowardice.” He is weak and spoiled, unwilling to make sacrifices for what he knows to be right. Like Dunsey, Godfrey is self-interested and shortsighted: he repeatedly puts off decisions about his future in the hope that his situation will right itself. Unlike the malicious Dunsey, however, Godfrey is basically decent and periodically attempts to do good. Godfrey’s resistance to the townspeople’s suspicions about the peddler shows that he is at least somewhat free of their antiquated superstitions.

For all his physical grace and strength, Godfrey is a passive character. The one significant act he has taken, marrying Molly Farren, occurred only under pressure from his brother and from Molly herself. Furthermore, even when pushed to act, Godfrey still tends to remain unwilling to own up to the greater consequences of his actions, and is thus left in limbo. Eliot contrasts Godfrey’s passivity not only with Dunsey’s active malice but also with Squire Cass’s violent temper. Like Godfrey, the Squire is lazy and fails to heed his troubles until they are impossible to ignore. The Squire only reaches decisions in fits of anger, making violent and rash resolutions that he refuses to revoke even when his head has cooled. Godfrey, in contrast, never erupts, and merely continues to backpedal.

Though Godfrey is incapable of action, his inaction nonetheless sets events in motion: it frustrates the Squire and Nancy, who wonder why Godfrey has not proposed marriage; it allows Dunsey to take advantage of Godfrey and act in his place; and eventually it forces Molly, and then Silas, into actions of great significance. Ironically, it is thus the perpetually irresolute Godfrey who drives much of the major action of the novel.