Franklin tells Betteredge about Herncastle's will.
After all, Franklin's father is a lawyer, so it makes sense that he'd be the one to write up a will for his brother-in-law, John Herncastle.
The will was kind of weird: it stipulated that, if Herncastle died from unnatural causes (i.e., if he were murdered or died suspiciously), that the diamond should be taken out of the bank where it was locked up, and sent to a jeweler to be cut into smaller pieces and sold.
The interesting thing about the diamond is that it has a flaw in the center of it, so it would actually be worth more money if it were cut into five smaller stones (each one of which would still be really big!)
But of course, if the diamond were cut into smaller stones, it would lose its unique identity as the Moonstone, and so the Indians would no longer try to recover it.
Basically, Herncastle's instructions to Mr. Blake ensure that the three Indians will not try to murder him to get the diamond back – if they kill him, the diamond will get cut up and they'll never get it back.
In his will, Herncastle says that he is leaving the diamond to Rachel to make up for any pain he gave to his sister, Lady Verinder, during his life. He specifically says that the diamond should be given to Rachel on her birthday.
Betteredge and Franklin aren't sure whether or not to believe that he was sincere.
Franklin isn't sure what to do – he doesn't know whether it will be dangerous for Rachel to have the diamond in her possession, particularly since he knows that he's been followed.
Betteredge points out that it's over a month until her birthday and that, in the meantime, the diamond should be put in the bank in Frizinghall (the closest town to the country mansion).
Franklin agrees, and jumps on a horse and rides to town.