The next day, the Yankee reveals his hidden network of nineteenth-century civilization. He posts a new challenge, saying that with 50 assistants on any appointed day he will destroy the entire massed chivalry of the Earth. The knights realize he has the power to do what he claims and fall silent for the next three years. After three years, the country is happy and prosperous, with a flourishing educational system, several newspapers, and widespread equality and freedom. The use of steam and electrical technology is common, and the nobles are given useful employment within the framework of nineteenth- century civilization. The Yankee continues to work on his plans to overthrow the Catholic Church and get a decree issued for universal suffrage after Arthur's death.
The Yankee has married Sandy. Their daughter, Hello Central, comes down with membranous croup, and the Yankee nurses her back to health with the help of Sir Launcelot, who is now president of the stock board. The Yankee and his family go on a cruise for two weeks and then stop off in France. At the end of a month, the Yankee sends for news from Camelot on his attempt to introduce baseball with teams made up entirely of monarchs. Hello Central falls into a relapse, and the Yankee and Sandy spend the next two weeks nursing her back to health again. When she recovers, the Yankee realizes his ship should have returned long ago with news from Britain. He rides to a hill overlooking the English Channel and finds that the usual fleet of merchant ships is nowhere to be seen. He decides to return to England and leaves Sandy and the baby in France.
He arrives and finds the whole country quiet and somber and nearly deserted. It has been placed under the interdict of the Church. The Yankee finds Clarence in a deserted Camelot. Clarence tells him how Sir Mordred and Sir Aglovale, after being bettered in a stock deal by Sir Launcelot, told Arthur of Guenever's affair. This led to war between the king and Launcelot and the death of many great knights of the Round Table. While the king was away fighting, he left Mordred, his nephew, in charge of the kingdom. Mordred took steps to cement his power and had the interdict of the Church placed upon him. The Yankee was included in the interdict. Mordred and Launcelot met in battle and kill each other. The Church has taken power, and Clarence reveals that he has found out the Church has been working against them all along and that the doctors who advised the Yankee to take his daughter on a sea cruise were in the Church's employ. The Church has destroyed the Yankee's nineteenth-century infrastructure, and the Yankee's trained employees have reverted to their previous superstitious states.
Clarence selected a group of 52 faithful boys who grew up under the Yankee's enlightened system and fortified a cave of Merlin's containing an electric plant with electrified fences, Gatling guns, and land mines in preparation for a siege. The Yankee issues a proclamation declaring all the old institutions of the monarchy, aristocracy, and the established Church to be null and void and calling for the people to assemble and elect representatives to govern them in a new republic. Then, he and Clarence hasten to Merlin's cave. The Yankee sends word to all his factories and centers of civilization to evacuate all personnel, as he plans to blow them up with secret mines connected to the cave with wires.
Nothing happens for a week, and the Yankee spends his time turning his journal into the narrative of the book. The nobles turn out to wage war on the Yankee and his followers for the Church, and it soon becomes apparent that the common people and even the former slaves have reverted to their previous subjugated states and joined the cause. All England turns out to destroy the Yankee and his dream of the republic. The boys approach the Yankee one day and tell him they cannot fight their own people, but the Yankee has prepared an answer. He tells them that the 30,000 knights will advance first, and when they hit the mines and begin being blown apart, the commoners will desert them, so that the boys will only have to fight the hated nobility. The boys are reassured and return to their posts.
The day of the battle arrives, and the knights lead the charge, just as the Yankee foretold. The first wave reaches the line of mines and explodes. The Yankee pushes a button and destroys his network of civilization-factories. The smoke clears, and the massed army is nowhere in sight. That night, the knights gather in the ditch created by the explosion in preparation for a sneak attack. The Yankee sneaks out and keeps a close watch on their progress and kills eleven thousand of them with the electrified fences. He catches the remainder of the knights between the ditch and the fences and gives the signal for the ditch to be filled with water. They open fire on the knights with Gatling guns, and the knights retreat back into the ditch, where they drown.