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As the play opens, the young King Richard II has just arrived at Windsor Castle, a royal headquarters near London. There he is to arbitrate a dispute between two noble courtiers, one of whom has accused the other of treachery. The accuser is the king's cousin, a proud young nobleman named Henry Bolingbroke, also called the Duke of Herford; he is the son of John of Gaunt, the king's aged and distinguished uncle. Bolingbroke is accusing Thomas Mowbray, the Duke of Norfolk, of several heinous crimes against his king and country. These crimes include embezzlement, general participation in conspiracy against the king for the past eighteen years, and--by far the most serious--Mowbray's participation in the successful conspiracy to murder another of the king's uncles (the late Thomas of Woodstock, Duke of Gloucester) a short time before.
Mowbray denies all these charges, although he does so in rather ambivalent terms: for instance, he acknowledges that he was aware of the scheme to kill Gloucester--and that he once laid an unsuccessful plot to kill the king's uncle, John of Gaunt--but he denies actual responsibility for Gloucester's death, and says he has repented all his bad intentions. Mowbray and Bolingbroke insult each other in increasingly angry, heated and creative terms: as Richard says of them, "High-stomach'd are they both and full of ire, / In rage, deaf as the sea, hasty as fire" (ll. 18-19)--that is, both men are rash, hot-tempered, and unwilling to listen to reason.
Mowbray and Bolingbroke call each other liars and traitors, and evetually throw down their "gages" (that is, their hoods or hats) at each other's feet, challenging one another to a traditional chivalric duel in order to settle the accusations. King Richard, with the help of Bolingbroke's father John of Gaunt, tries to convince the two to reconcile, but they both refuse as a point of honor. So Richard sets a date--St. Lambert's Day--for the two to have a formal, traditional duel, in order to settle the challenge.
This crowded, busy, and confusing scene has two main functions: it both throws us into the action in medias res--that is, in the middle of things--and provides us with some background information about the meaning of the events that are occurring. We can tell from the very start that this play will be full of characters who are nursing old grudges, and who carry contradictory interpretations of past and current events. We also see instantly that the play will be very heavily influenced by events which have occurred in the past: these two young noblemen, Bolingbroke and Mowbray, are accusing each other of committing crimes which have happened before the play even began.
It is important to bear in mind that this play and its events are part of a larger context: that is, they are part of the long continuum of English history, and belong to a tradition of documents and literature that chronicle the wars and the dynasties of English royal houses. In Shakespeare's history plays, nothing happens in a vacuum; all the action is informed by earlier events, which Shakespeare's audiences would have been familiar with in the form of folklore or history books.
Bolingbroke and Mowbray's mutual accusations are complicated for various reasons. On the surface, what Bolingbroke says is simple enough: he accuses Mowbray of having embezzled the money which the King gave him to raise and supply his armies; he claims that Mowbray has been instigating plots against the King for eighteen years (the historical reference is to Wat Tyler's rebellion in 1381); and he charges Mowbray with having conspired in the murder of the king's uncle, Thomas of Gloucester. Mowbray's rebuttals are framed in ambiguous language, especially in regard tot he death of Gloucester: "I slew him not, but to my own disgrace / Neglected my sworn duty in that case" (133-134). This scene is confusing, in part, because it actually centers around an unspoken truth that no one dares speak aloud: everyone is aware that King Richard II himself was, in fact, involved in his uncle's death. We will learn this fact explicitly from John of Gaunt in the scene which follows, but the lack of clarity surrounding Bolingbroke's accusation and Mowbray's rebuttal introduces the atmosphere of official hypocrisy, the morass of dark court secrets, and the looming shadow of the past which will affect events at court and in the kingdom throughout the play.