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Mr. Squeers, in disguise, is sitting in a mean room. He is not in a happy state of mind, having spent six weeks on the trail of the Silderskew woman. Meanwhile, he worries that his school will fail while he is gone.
He reminds himself that he will make 100 pounds from this and cheers up a little. He rereads a letter. It is detailing the going-ons at the school—which child is sick, which one has died, which one is complaining about the food, etc. Squeers vows to give out several beatings when he returns.
He goes to Peg Silderskew’s apartment. After some idle conversation, he tells her he is a lawyer who can help people who have stolen things. Peg asks if Arthur married. Squeers says no—and a young lover took Arthur’s bride off. Peg begs him to tell the story again, relishing it. He complies. He tells her she got her revenge.
He wants to look at the deeds. Peg isn’t willing to show them just yet. He tells her she is a bold woman to keep papers she could turn into money. She agrees.
She wants to burn what isnt’ useful, get money for those that are valuable, and get Arthur into trouble with those that are incriminating. Squeers asks why she didn’t take money when she left. She said that Gride would have pursued her if she had taken money. She took what he couldn’t risk being made public.
Squeers has her burn the box after emptying its contents to distract her while he looks for the deed among the papers. He and Peg are too distracted in their tasks to notice that Frank Cheeryble and Newman Noggs have entered. Newman wants to conk Squeers on the head, but Frank restrains him.
Squeers can’t find the deed he is looking for right away. He finally finds it. He orders Peg to burn the papers, but Noggs hits him before she can.
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