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Fowler recalls the night when Pyle first met Phuong. Fowler and Phuong are having a drink at the Continental Hotel when Pyle comes over and asks them to come sit at his table. They join Pyle and the American economic attaché, Joe. Bill Granger arrives at the same time. He is an American correspondent who has just returned from a press conference in Hanoi. Joe asks Granger to confirm a rumor that the Viet Minh have broken into the town of Phat Diem and burned the cathedral there.
Granger wants to stop talking politics and announces that he is off to the House of Five Hundred Girls, a in the district of Cholon. At his invitation, Fowler, Phuong, and Pyle accompany him to Cholon, where they plan to dine at the nearby Chalet. The four split up into two trishaws (a type of pedicab). Pyle and Granger arrive first and head into the . When the others arrive, Fowler tells Phuong to get a table for three at the Chalet before entering the to find Pyle. Both Granger and Pyle are surrounded by women, and Pyle is evidently horrified by the experience. Fowler thinks to himself that Pyle might be a virgin, and fueled by a desire to protect him, Fowler drags Pyle from the club.
Fowler and Pyle join Phuong in the Chalet, where there is music and dancing. As Pyle apologizes to Phuong for the delay, Fowler remembers his courtship with her. He had first seen her at a dance at the Grand Monde, where she was a hostess, and he recalls watching her dance with an American man who held her too tight, seeming to mistake her for a . Phuong left him in the middle of the dance and rejoined her sister. Fowler admired how she handled herself in the situation. The courtship that followed was long, and it took another four months before they became intimate.
Pyle dances with Phuong, and Fowler thinks he holds her at too great a distance. Miss Hei, Phuong’s sister, joins Fowler and asks him about Pyle. When the dancing couple returns, Miss Hei and Pyle strike up a conversation. Miss Hei is attracted to Pyle’s formality and politeness. She asks Fowler to set up another meeting with Pyle, and when Fowler explains that it will have to wait until he returns from a trip north, she suggests that Pyle should come visit her and Phuong while Fowler is away.
After dinner, Phuong and Pyle dance again. As he watches, Fowler regrets having learned of the rumor about Phat Diem. He asks himself why he should go, risking death. He reflects on a longstanding belief in impermanence, and he thinks about how he has always seen death as the only absolute truth. At last, he thinks to himself that enemies are valuable because they can grant a man the “immeasurable benefit” of killing him, whereas friends
Pyle and Phuong return as a cabaret performance begins. The first act is obscene, but Pyle cannot understand the French, so he laughs along without comprehending. A later act, however, features a troupe of female impersonators, to which Pyle reacts with violent disgust. He tells Fowler that they should leave because the material is not suitable for Phuong.
Chapter 3 highlights the danger Pyle’s innocence poses to Fowler’s personal life. In the chapter’s first section, Fowler characterizes Pyle as someone who is fragile and hence in need of protection. When Fowler follows Pyle into the House of Five Hundred Girls, he does so because he senses the American’s schoolboy-like inexperience and feels the need to look after him. Inside the , Fowler finds Pyle surrounded by Vietnamese and unable to decide what to do. On the one hand, Pyle feels disgusted by the atmosphere and wants to escape. On the other hand, he does not want to offend the women by leaving. These opposing desires express an even deeper conflict in Pyle, who feels pained at the idea that these beautiful women could be so poorly treated. This episode is significant because it foreshadows Pyle’s concern about how Fowler treats Phuong. Indeed, when Fowler tries to get Pyle to forget the women by reminding him that Phuong is waiting at the Chalet, Pyle says that he should not have left her alone. With the advantage of hindsight, Fowler the narrator recognizes Pyle’s criticism as an ill omen and chastises himself for not heeding the warning sign.
Fowler feels threatened by Pyle, and in the chapter’s second section he compares himself with the American more closely. In particular, Fowler compares Pyle’s first meeting with Phuong to his own. One significant difference between their stories relates to how the two men interact with Phuong’s sister, Miss Hei. Fowler recognized early on that Miss Hei has a strong influence on Phuong’s opinions. Fowler knows that his marriage to a woman in England makes him unsuitable for Phuong in Miss Hei’s eyes, and for this reason he avoided her during his courtship of Phuong. As a result, their relationship has always been strained. Pyle, by contrast, gets along with Phuong’s sister, and Fowler immediately senses her interest in him. Not only is Pyle a more eligible bachelor, but he is also serious about having a family. Whereas Fowler’s relationship with Phuong seems doomed to end when he leaves Vietnam, Pyle could offer Phuong a viable future. By the end of the chapter, Fowler clearly sees Pyle as an enemy. What began as a retelling of how Pyle met Phuong has transformed into an account of the initial step in their courtship.
In contrast to Pyle’s earnest demeanor, Fowler portrays himself as being melancholy and philosophical. This depiction comes through near the end of 3, when he reflects on death and impermanence. Fowler’s thinking here is complex, as it plays out on both abstract and concrete levels. On the abstract level, he contemplates how nothing is permanent, which means that loss and the pain associated with are inevitable. Instead of seeing death as the ultimate source of loss and pain, Fowler characterizes death as event that brings an end to loss. As an atheist, he believes that death is a permanent state, which means that there is nothing more to lose in death. On a concrete level, Fowler’s philosophy of impermanence relates directly to his fear that he will lose Phuonga fear made more potent because Fowler the narrator already knows that this will in fact happen. As long as Fowler remains with Phuong, he will worry about losing her, and this worry will keep him unhappy. Pyle therefore has the surprising ability to end Fowler’s state of unhappiness by stealing Phuong and thus metaphorically “killing” Fowler, ushering him into the painless state of death.