Farebrother catches Lydgate alone after dinner at the Vincys. He thanks Lydgate for freeing him of his gambling habit by convincing Dorothea to give him the Lowick parish. He says that he is chastened to realize how much a man's good behavior depends on not being in want of money. Lydgate coldly replies that all money seems to come by chance, especially money earned in a profession. Lydgate's fatalistic attitude surprises Farebrother. He intuits that Lydgate is having trouble, so he hints that a man should depend on his friends. Lydgate continues to behave coldly. His distrust wounds Farebrother.
Lydgate is so deeply in debt that he needs at least one thousand pounds. He tells Rosamond that he wishes to move to a smaller, cheaper house. Ned Plymdale and his new wife are looking for a suitable home. They are wealthy, and Lydgate thinks they will take the house as well as most of the furniture. Lydgate plans to employ Trumbell to negotiate the deal with Plymdale. Rosamond pleads that Lydgate write Sir Godwin and ask for money. Lydgate refuses.
Rosamond secretly pays a visit to Trumbell and revokes Lydgate's order. She needles the information out of Lydgate that a thousand pounds is necessary to remain in their present home. She secretly writes Sir Godwin asking for that sum. Lydgate tells her that he plans to instruct Trumbell to advertise their home in the papers, and Rosamond confesses that she revoked his order. Lydgate is furious. He begins thinking about traveling to see his uncle, Sir Godwin, to ask for money.
A letter from Sir Godwin arrives, but it is addressed to Lydgate. When he reads it, Lydgate pales with anger and castigates his wife for her habit of acting secretly. Sir Godwin writes to order Lydgate never again to set his wife to write him when he has something to ask. He has no money to spare, because the rest of the family is continually draining him. Lydgate rails at his wife, but she responds with stubborn silence. Finally, she tells him that he has made her life unpleasant and that marriage has brought hardships upon her. She cries and Lydgate tenderly consoles her.
Lydgate goes to the Green Dragon to speak with Mr. Bambridge about trading his good horse for a cheaper hack. Bambridge is not there, however, so Lydgate plays billiards to pass the time. The spectators begin placing bets. Before long, Lydgate is betting on his own play and winning. Meanwhile, Fred Vincy arrives. Lydgate's frenzied betting startles him. He considers placing some bets, but Lydgate's strange behavior kills the impulse. Lydgate has begun to lose, but he doesn't stop betting.
Fred receives the message that Farebrother is waiting to speak with him downstairs. Hoping to save Lydgate from further loss, Fred asks him to act as a shield because Farebrother is sure to castigate him. Lydgate agrees. After some small talk, Lydgate departs, and Farebrother hints that he will court Mary himself if Fred falls into his former extravagant ways. Fred promises to stay away from the Green Dragon.
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