After a year and a half at their new clinic, things are not going well. Dick is dissatisfied and Nicole is not feeling very strong. Dick's heart goes out to one of his patients, an artist who is losing her battle for sanity and her beauty.
Things worsen when Nicole discovers a note from a former patient accusing Dick of seducing her daughter. Dick had kissed the girl but angered her when he would not allow the affair to continue, but Nicole assumes the worst. Dick takes the family to a fair where Nicole flees and becomes hysterical. On their drive back to the clinic, she grabs the wheel and runs the car off the road, almost killing them all and laughing the whole time.
Dick decides to take a leave of absence and heads to Berlin, leaving his family at the clinic. Dick meets Tommy Barban by chance, who has just helped the Russian Prince Chillicheff escape from hiding in Russia. Dick learns from Tommy that Abe North was been beaten to death that morning in a speakeasy in New York. He is aghast, while all the men can talk about is what club he crawled to before he died.
Quite shaken, Dick heads to Innsbruck, thinking how the spear of his intellect has been blunted over the years of his marriage and how he has lost himself. He considers having an affair with a pretty woman he meets in his hotel lobby, but it doesn't materialize. When he reaches his room, he finds a telegram reporting the death of his father. Dick calls Nicole, regretting his past, before shipping home to New York.
Reaching America, Dick feels he has come home. He lays his father's body to rest in a graveyard full of his family. On his return to Europe, Albert McKisco is billed as the ship's most precious cargo. Changed by his duel with Tommy Barban, McKisco has become a well regarded, if somewhat simple, writer. Dick finds the man's company pleasant now that he no longer displays his old inferiority complex.
Arriving in Rome and checking into a hotel, Dick bumps into Rosemary, and they make a date to meet. Collis Clay reappears as well, down from studying architecture in Florence.
The sanitarium by no means improves the mental stability of the Divers. Dick, perhaps confronted by his own unrealized dreams, cannot hold it all together anymore. His affection for young girls dooms him again, even though he has done little wrong. Nicole's proximity to the institution hurts, rather than helps her convalescence. Nicole's violent outburst forces a change in Dick's life and ultimately produces an irrevocable turning point for him.
The moment in which he learns of Abe's death is the first time that violence gains an importance to Dick beyond its influence on his social status. Perhaps Dick sees in Abe's death a prefiguring of his own future.
The news of his father's death hits Dick hard. In the midst of his crisis, his father's purity and stringent adherence to fine manners causes Dick to further observe how far he has fallen. He has not been as good as his father.
On reaching America, Dick's "homeland," he feels a link with his environment, but at the same time he realizes that with the death of his father his last tie with America has been severed. He thinks to himself that he will likely not return, and yet this very moment foreshadows his return. These small New York burghs are his home, and Dick's American identity is never more evident.
The reappearance of McKisco, with his new success and confidence, serves here to highlight Dick's failures. Though Dick is blessed with more fundamental gifts, McKisco has been recognized as the success.