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When Zero gets back to the tent that night, Stanley asks him about his grand digging gesture. Turns out Zero was helping Stanley out since he knows he didn't steal the sunflower seeds. And when Stanley points out that Zero didn't steal them either (good point), Zero tells him, "You didn't steal the sneakers" (22.14).
It seems like Zero is a pretty decent dude after all, so Stanley tells him that he will try to teach him to read.
Zero doesn't even know the alphabet, but he learns it pretty quickly once Stanley recites it for him. In fact, Zero's a pretty bright kid: he also has some math chops in him.
The boys strike a deal: Stanley will teach Zero more letters every day, and in return, Zero will dig some of Stanley's hole. This way Stanley will have more energy for teaching. Sounds like a fair trade.
Later that night, Stanley lies in bed worrying – what's new, right? He's not sure what X-Ray will think about the fact that Zero's helping him dig his hole.
And now for some more thinking. Stanley remembers his meeting with the Warden: her fingernail polish, her makeup kit… and bam! Suddenly Stanley realizes what the gold tube was: part of a tube of lipstick.
Remembering the inscription on the bottom of the tube ("KB"), he wonders if that lipstick might just have belonged to Kissin' Kate Barlow.