The furmity-woman’s revelation about Henchard’s past spreads through the town, overshadowing all the “amends he had made.” His reputation as a man of honor and prosperity declines rapidly. One day, Elizabeth-Jane notices a crowd gathered outside the King’s Arms (the inn at which she first sees Henchard presiding over the prestigious dinner as mayor). She learns that the town commissioners are meeting with regard to Henchard’s bankruptcy. Having surrendered all his assets, Henchard offers the commission his last valuable possession: a gold watch. Though they find the gesture honorable, the commissioners refuse. Henchard sells the watch himself and offers the money to one of his smaller creditors. When the remainder of Henchard’s effects are auctioned off, Farfrae purchases his business. Elizabeth-Jane makes numerous attempts to contact Henchard, wishing for an opportunity to “forgive him for his roughness to her, and to help him in his trouble,” but to no avail. Henchard moves into a cottage owned by Joshua Jopp.
In Casterbridge, there are two bridges where “all the failures of the town” congregate. One evening, while Henchard stands on the more remote bridge, Jopp meets him and explains that Lucetta and Farfrae have just moved into Henchard’s old house, which Farfrae purchased along with all of Henchard’s furniture. Jopp leaves, and Henchard is soon met by another traveler, Farfrae himself. Having heard that Henchard plans to leave Casterbridge, Farfrae proposes that he live in the spare rooms of his old house. Henchard refuses. Farfrae then offers Henchard whatever furniture he might want. Henchard, though moved by the man’s generosity, still refuses.
Elizabeth-Jane learns Henchard has fallen ill and uses his confinement as an excuse to see him. At first, Henchard tells her to go away, but she stays and not only nurses him to a quick recovery but provides him with a new outlook on life. Henchard goes to Farfrae’s corn-yard to seek employment as a hay-trusser. When he hears that Farfrae is being considered for mayor, however, he begins to lapse into his old moodiness, counting the number of days until his oath to abstain from alcohol is up. When that day arrives, Elizabeth-Jane hears that Henchard has begun to drink again.
After Sunday church services, the men of Casterbridge gather at the Three Mariners Inn to discuss the sermon, sing, and “limit [themselves] to half-a-pint of liquor.” Released from his vow, Henchard flouts this tradition by getting drunk and singing insulting words about Farfrae to the tune of a psalm. Elizabeth-Jane arrives to bring Henchard home. On their way, he complains that Farfrae has taken everything from him and that he will not be responsible for his deeds should they meet. Worried that Henchard will make good on this threat, she decides to keep an eye on him and, during the week, goes to the hay-yard to help him with his work.
Several days later, Farfrae and Lucetta come to the hay-yard. Lucetta is surprised to see Henchard there. Henchard speaks to her with bitter sarcasm, and the next day she sends him a note asking him not to treat her so poorly. With this incident, the gulf between Henchard and Lucetta grows wider. Later, Elizabeth-Jane observes Henchard and Farfrae on the top floor of the corn-stores and believes she sees Henchard extend his arm as if to push Farfrae. She decides it is her duty to warn him of the apparent danger in which he is placing himself by associating with Henchard.
The next morning, Elizabeth-Jane approaches Farfrae as he leaves his house. She warns him that Henchard may try to harm him. Unable to contemplate such evil motives, Farfrae dismisses the warning. Wanting to provide a “new beginning” for the man who, years earlier, had offered him a job and position, Farfrae arranges to purchase a seed shop that Henchard can manage. While Farfrae and the town clerk arrange the matter, the town clerk confirms that Henchard hates Farfrae. Farfrae is troubled by this news and decides to delay the purchase of the seed shop.