T. J. fools Stacey into giving him his new coat, because it will fit him better. Uncle Hammer is furious, and tells Stacey to let T. J. keep the coat. The day before Christmas, Papa returns from the railroads. That evening, everyone in the family, including L. T., gathers to tell stories. Eventually, L. T. tells the story of a previous Christmas, in 1876, when a gang of white men came to his house and killed his parents. The children are horrified, but Papa wants them to hear about their history. In the middle of the night, Cassie wakes to overhear the adults talking about the boycott of the Wallace store and of the need for someone to give the black community credit so they can shop in Vicksburg. They think of using the farm as collateral, but they don't want to lose their land.
The children are delighted to receive books for Christmas. Stacey and Cassie get books by Alexander Dumas and Christopher-John and Little Man get two volumes of Aesop's fables. The Averies join the Logans for Christmas dinner. Jeremy comes over and gives Stacey a whistle. Stacey doesn't know how to react, and after Jeremy leaves he asks Papa. Papa says there's nothing wrong with friendship, but that friendship with whites usually leads to trouble.
A few days later, the family gets a visit from Mr. Jamison. He is there with papers for Big Ma to turn legal ownership of the farm over to Papa and Uncle Hammer, to make sure the land stays in the family. Then Jamison says that he is willing to back the credit of the families that want to boycott the Wallace store and shop at Vicksburg. Soon, the Logans are transporting goods from Vicksburg to sharecropping families in their community. Harlan Granger, who has interest in the Wallace store, comes over to harass them about the shopping at Vickburg. He threatens that the bank will foreclose on the loan the Logans took out to buy their property.
Uncle Hammer leaves around New Year's. Papa talks to Cassie about the incident with Lillian Jean. He tells her to take action only if she must, and that she mustn't do anything that Lillian Jean and Jeremy's father would hear about. So, Cassie pretends for a month to be very nice to Lillian Jean. She carries her books on the way to school. Lillian Jean confides her secrets to Cassie. Finally, Cassie beats her up, and when Lillian Jean threatens to tell her father, Cassie threatens to tell everyone all of her secrets. Cassie is satisfied.
One day, Harlan Granger, Kaleb Wallace, and another member of the school board come to Mama's class. They find how she has altered the textbooks to hide the word "negri" and they find her teaching "inappropriate" things. She is fired. The children find that it was T. J. who told Kaleb at the Wallace store about the textbooks. T. J. was upset at having failed the most recent examination. The children turn on T. J., and are no longer his friend.
The boycott of the Wallace store is one of the most important overarching elements of the plot. It was the Wallaces who burned John Henry Berry alive. Also, Harlan Granger owns the land the Wallace store occupies, and he receives a large share of the store's profits. The Wallace store is the only place in the area where the community's black sharecroppers can shop. Times are tough, and so they do not pay in cash. Instead, their tab is paid by whoever owns the land they work. Thus, when the Logans and Mr. Jamison devise a plan whereby families can shop elsewhere, Harlan Granger is upset. He wants to get at the Logan family anyway he can, in order to stop the shopping in Vicksburg. He also wants the Logan land very much. The Logan's took out a loan from the local bank in order to buy their land. They make regular loan payments. However, since Harlan Granger is a powerful man, he can get the bank to demand full payment of the loan. Then, the Logans would need money, and they would have to let Granger buy the land. Granger hopes that this fearful possibility will convince the Logans to stop the boycott of the Wallace store. Another tactic Granger uses to discourage the Logans is taking away Mama's teaching position.