Art arrives after dinnertime for another session with Vladek. Vladek chides Art for not coming earlier to help him clean the drainpipes. Vladek gets back on his exercise bike, and Art pulls out a tape recorder. They bicker about how much – or how little – Art paid for the tape recorder.
Vladek takes up the story from the time he returned to Sosnowiec. It’s a full house at his father-in-law’s household; Vladek lives there with Anja, Richieu, and a host of relatives. To make up for meager rations, they have to buy and barter on the black market. His father-in-law’s factory has been taken over by the Germans, so the family has to live on savings.
Vladek rummages around for jobs on the black market. He sells surplus cloth for a while. Needing a work permit, he gets one from a local tin shop, where he hides when the German soldiers come by. At the tin shop, Vladek learns a few carpentry skills that will help him at Auschwitz.
About a year passes, and things grow worse for the Jews in Sosnowiec. Groups of Jews are rounded up and beaten. Vladek and his friend Ilzecki discuss whether they should send the children somewhere else, until the war ends, but Anja refuses. While Ilzecki’s son survives the war, Richieu does not. Vladek jumps ahead to 1943, when Tosha took the children, but Art chides him for getting the chronology confused so Vladek sticks with 1940.
Vladek and his family are then forced to move into a ghetto, where the twelve of them have to make do in two and a half rooms.
Vladek’s father-in-law’s friends are caught for dealing in the black market and are hanged publicly in the street. They are left there, hanging, for a full week.
During this time, Vladek mentions that Anja was writing in her diaries. Art asks to see them, but Vladek tells him that these diaries didn’t survive the war. But Anja had started a whole new set of diaries after the war. Art wants to see these, but Vladek quickly changes the subject.
Vladek continues dealing in the black market and narrowly escapes being caught by the Germans.
The time comes when the Germans announce that all the elderly are to be shipped off to Theresienstadt, Czechoslovakia. The notice makes Theresienstadt sound like a pleasant convalescent home. Vladek and his wife’s family, the Zylberbergs, hide the elderly grandparents, but the Germans threaten to take the entire family if the grandparents don’t go, so they reluctantly let the grandparents go.
A few months later, the Germans announce that the Jews have to collect at Dienst stadium to “register.” Vladek’s father and sister, Fela, who has four children, also come to Dienst stadium. Any working age man or woman and small families are given stamps on their passports; the elderly and larger families are grouped on the other side of the stadium. While Vladek’s father ends up with a stamp on his passport, his sister is placed with her family on the other side of the stadium. Worried, his father crosses over to the other side. While the other Jews are allowed to go home, over a third of them are left at the stadium.
Weary, Vladek stops telling stories and lies down. Art sees Mala, and Mala tells him how those left in the stadium were taken to cramped apartments and then to the concentration camps.
Art and Mala look for Anja’s diaries in Vladek’s den. While they find a lot of rubbish, there are no diaries to be found.