Fred and Rosamond ride over to Stone Court, as planned.
Mr. Featherstone is bossing Mary Garth around before they get there, and being rude to his sister, Mrs. Waule.
Mrs. Waule is telling him that Fred Vincy has been borrowing money from people in town, using his expectations of an inheritance from Mr. Featherstone as security.
Mr. Featherstone is irritated that Fred would assume that he's going to be a beneficiary in his will, but he's also irritated that his sister is tattling on Fred. Basically, Featherstone is always irritated with everybody.
Just then, Fred and Rosamond arrive, and Mr. Featherstone unceremoniously asks his sister to leave.
Rosamond leaves to have a private chat with Mary Garth, and Mr. Featherstone is alone with Fred.
He asks him about what Mrs. Waule had said, and Fred denies ever having borrowed money using Featherstone's estate as a security.
Mr. Featherstone wants more than denials, though – he wants proof. He tells Fred to come back with a letter from Mr. Bulstrode (remember, Bulstrode is the husband of Fred's father's sister).
Mostly Mr. Featherstone just wants to order people around, since he's too old and sick to get out much anymore. And here's a great opportunity for him to wield his power over Fred, and he's not going to let it go to waste.
Featherstone bargains with Fred, and promises to give him a gift of some cash to cover his debts if he'll bring the letter from Mr. Bulstrode.
Fred reluctantly agrees.
Mr. Featherstone notices that Fred brought books with him to lend to Mary Garth. Mr. Featherstone is annoyed, and forbids Fred from bringing Mary any more books. He doesn't like to see her amusing herself, and he likes asserting his power. Fred agrees, but secretly plans to do it anyway.
Meanwhile, Rosamond is upstairs with Mary Garth. She looks all the prettier next to Mary, who is relatively plain. Plain, but honest.
Rosamond tries indirectly to ask Mary about Mr. Lydgate, since he's Featherstone's new doctor, but Mary cuts to the chase – she likes direct questions, not a lot of beating around the bush.
Mary describes Lydgate, and reminds Rosamond that she'll probably see him, anyway – he comes everyday at about this time to check on Mr. Featherstone.
Rosamond blushes: she knew that she'd probably run into the young doctor, and that's why she decided to come.
They change the subject and begin discussing Fred.
Rosamond says that their father is awfully angry with Fred, because Fred decided not to finish his university degree.
He'd only been sent to university because his father wanted him to be a clergyman, but Fred decided that he wasn't "fit" to be a vicar, so he left school.
Mary takes Fred's side in the debate, and Rosamond insinuates that she's only siding with him because she's in love with Fred.
Mary says she wouldn't marry Fred if he did ask her, and he hasn't anyway.
They make up (kind of), and go back downstairs.
Mr. Lydgate arrives just as Rosamond is finishing a song (she'd planned it that way).
He's struck by her beauty, and their eyes meet just as Rosamond had imagined: he turns a little pale, and she blushes.
Rosamond and Fred leave together and ride home in silence – Rosamond fantasizing about her future married life with Mr. Lydgate and her visits to his fancy aristocratic relatives, and Fred brooding over the unpleasant conversation he's going to have to have with his uncle Bulstrode.
Before they reach home, he decides that he'll explain the whole thing to his father, and maybe get his father to discuss the matter with Mr. Bulstrode.