Lily attends a horse show with Mrs. Gormer, but she can tell that she has "failed to make herself indispensable" and that Mrs. Gormer is getting ready to sacrifice Lily so she can be friends with Bertha.
Lily realizes that, if she took Rosedale's offer, she could easily best Bertha Dorset. She starts dreadfully missing even the most mundane activities of her former social life.
Gerty Farish is more than ready to help her friend, but Lily has been staying away from Gerty's place since she came back to town.
On one particular visit, however, Gerty tells her the story of Jane Silverton – Ned Silverton's sister, who is stricken by her brother's gambling debts. The news is that Bertha has broken with Ned and now the Silverton family is up a creek without a paddle, social or financial. Meanwhile, the Van Osburghs dislike Ned for being a bad influence on young Bertie Van Osburgh, who is thinking of marrying some "dreadful" woman of whom his family does not approve.
Lily, realizing that she will soon be in the same debt-stricken situation as the Silverton sisters, asks to know more.
Gerty explains that she's trying to find them some work, but they don't have very many employable skills.
Gerty notices that Lily looks particularly tired and distraught. Lily explains that she hasn't been sleeping at night, and then takes great offense at being told she looks that way. (It means that she's ugly, in her mind.)
Lily rants about how living with the rich is expensive, and how she has to pay taxes on the luxuries they provide.
Lily admits that she's "sick to death" of all of this, but the thought of giving it up kills her. She's nearly at the end of her rope and can't go on much longer.
Finally, she excuses herself, as she has to go meet Mrs. Fisher.
As she hurries away, Lily realizes that she, too, will soon have to find a way to earn a living. She finds this an odious thought.
She also thinks herself incapable of doing a real day's work.
Still, she trusts that Mrs. Fisher will create an artificial demand for whatever talents Lily can supply.
Meanwhile Gerty thinks about Lily's plight and decides to entreat Selden's help, mostly because it's an excuse to spend time with him.
Selden, who is still completely clueless as to Gerty's feelings for him, tells Gerty that, actually, he hasn't even seen Lily lately. He's not involved in her affairs whatsoever. However, he has heard the rumors, and he knows that she's been exiled socially on account of Bertha Dorset.
Gerty thinks that Selden can help Lily by being a friend to her. He doesn't think this will do anything for Lily, but admits that he'd help her if he could.
Gerty says that he should talk to Lily and show her that she can indeed live a full life without exorbitant cost. She informs him of Lily's seeming depression and adds that she's recently taken a job as a social secretary.
Selden agrees to talk with Lily. He doesn't admit to Gerty the truth, that he's actually been avoiding Lily intentionally. He was not pleased to hear that she had joined the Gormers and their friends, because it shows that she wants a life in society at any cost. He feels that she has moved further than ever from the common ground she and he once shared.
In trying to contact Lily, Selden finds that she's moved away. He gets a new address, sees that it is "care of Mrs. Norma Hatch," and becomes further disgusted. In his mind, Lily has sunk to a new low.