Hey, guess who invested a lot of money in the Merdle business? That's right, it was Arthur. Poor, dumb Arthur.
And guess whose money it all was? It wasn't just his – it was Doyce's too. Oh, yeah. Arthur invested all the company money! Which is now all gone.
Pancks finds Arthur with his head on his desk. Pancks commiserates, feels horrible, and demands that Arthur yell at him. Arthur does, half-heartedly.
Pancks then offers to get Rugg, the lawyer, to talk to Arthur about his options.
Rugg wants immediately to try to isolate Arthur as much as possible from the losses.
But Arthur wants only two things: 1) to take full moral responsibility for the money loss, and publish his guilt and remorse in the papers, and 2) assume total financial responsibility for everything.
Rugg is all, um, I advise against that. But Arthur won't change his mind, and so the notices about how he, not Doyle, is to blame go out all over town.
Everyone in town is psyched to have a scapegoat. Although it's sort of unclear what exactly they are scapegoating Arthur for, since all he did was invest in the Merdle stuff like everyone else. Shmoop's going to go out on a limb and say that this might be a place where Dickens shows that he doesn't have the clearest understanding of how investments worked before the days of corporations and stocks.
But in any case, warrants are out for Arthur's arrest for debt.
Arthur says he wants to be taken to the Marshalsea prison rather than the new one that was just built. And so it happens. He is arrested by a randomly totally heinous anti-Semitic stereotype. (Yeesh, Dickens, bigotry much?)
At the Marshalsea, Chivery is the turnkey and is shocked to see Arthur.
After a while, John Chivery takes Arthur to his new room. Surprise – it's the Dorrits' old room!