Selden goes to Carry Fisher's house to find Lily, but when he arrives he learns that Lily has left already for the Trenor house. Mrs. Stepney comments that this is odd, because the Trenors are not supposed to be in town. Selden leaves Carry Fisher's and begins to walk to the Trenors accompanied, to his discomfort, by Ned Van Alstyne. As they arrive at the Trenor house, they see two figures emerge from the dark house, one of whom scurries down the steps to the hansom waiting in the street. Selden knows that the two figures are Lily and Trenor, which hurts him deeply; he now suspects that Lily is indeed having an affair with Trenor.
Meanwhile, Gerty Farish is increasingly discontent, suspecting an affair between Selden and Lily. She is jealous of Lily's enjoyment of society, and believes that Lily judges her unfairly based on her lack of prestige. As she thinks of her hatred for Lily, someone, who turns out to be Lily, knocks on her door, which Gerty promptly opens. Lily looks distraught and says she needs help because she cannot go home. She hates the thought of herself, believing she is going from bad to worse. Gerty lets her stay at her home for the night. Lily confesses that she is in dire need of money, and Gerty tells her that Selden went looking for her at the Trenors.
The next day, Lily wakens and goes home. She explains to Mrs. Peniston some of the events of the previous day before lying down to rest. Later, she confesses to Mrs. Peniston her financial problems, and Mrs. Peniston reluctantly agrees to pay her clothing debts. However, Mrs. Peniston is greatly angered by Lily's confession that she plays cards for money, even on Sundays. Mrs. Peniston calls Lily a disgrace and agrees to pay only her clothing debts. Lily becomes even more distressed and upset, but she still refuses to consider marrying Selden. She waits for his arrival, but Selden, disgusted by her dealings with Trenor and not wanting to have anything to do with her, has decided to stand her up. Instead of Selden, Rosedale appears at Lily's house and proposes marriage. He says has too much money, and he desires to get a wife and make her rich. Lily, who still dislikes Rosedale, asks for time to decide, which he grants before leaving. Selden does not show up; we learn he has left for the Caribbean Sea on a sailing ship. Instead, Lily receives a note from the Dorsets inviting her with them on an unexpected Mediterranean voyage to France. Lily decides to accompany them.
In dealing with human relations, the novel of manners usually touches on some form of situation cruelty. In The House of Mirth, this cruelty comes up in several places. In the first few paragraphs of the novel, we see Selden play a devious mind game on Lily to determine why she is at the train station all by herself. His game is cruel because he is trying to trap her in some sort of situation she cannot easily explain. In Chapter 13, Lily capitalizes on her own power, which results from her ability to refuse marriage, to cruelly inflict pain on others. We see her sense of "triumph" when she realizes that none of Selden's promises or ideas about marriage could overcome her simple ability to deny his marriage proposition. Even though she has come close to breaking Selden's heart, all she can think of is the wonderful feeling that comes with having power, even though she wields it in a way that harms others. We see that Lily loves being in command, and that she values power above the sentiments of others, including Selden.
Despite the prominence of acting in the novel, there are some moments when a character breaks out of the social norms of behavior in order to discuss his or her emotions plainly. One such case is in Chapter 13, when Gus Trenor tells Lily, "I know I'm not talking the way a man is supposed to talk to a girl—but hang it, if you don't like it you can stop me quick enough—you know I'm mad about you." In this scene, Trenor breaks out of the way he is "supposed" to act toward Lily, which is a dangerous thing to do in such a judgmental society. In doing so, though, he opens up a very large plot element. It is becoming clear that Trenor was investing in the stock market not with Lily's money (of which there is none) but with his own, and he was giving his profits (of around $9,000) to Lily. Lily is beginning to realize this as Trenor skirts around the issue. The implications for her are severe because she has been living and spending under the assumption that the money Trenor was giving her was in fact her own, not his. Now, she feels a need to repay him financially, even though he seems to suggest that she can pay him back simply by spending large amounts of time with him (possibly submitting to an affair). Nevertheless, Lily wants to pay him back, even though there is no simple way for do so because of the large sum of money involved.
The end of Book One contains some eerie foreshadowing of how the novel will end. Lily realizes that "Selden's love could not be her ultimate refuge," which leads to the question of what her ultimate refuge could be. Of course, the reader knows that the only true ultimate refuge in any situation is death, and so Lily's thoughts on suicide in the next paragraph are somewhat disturbing. Lily does indeed think of how all her problems could be brought to a close by drowning herself, but she decides against that in favor of recovery.