Jerry leaves his apartment with an armful of canvases and heads down to the café, where Adam introduces him to Henri. Jerry recognizes Henri from the stage.
Jerry asks Adam if he can borrow some money for lunch, but Adam says he's tapped out. Then Henri offers Jerry some cash. Jerry says he can't take Henri's money because he hasn't known him long enough. Adam asks Henri to borrow 300 francs, and then he gives it to Jerry. Well, that settles it.
Time for a musical number. Henri sings "By Strauss." Adam plays piano. Jerry dances with a little old lady. The staff and other patrons at the café are charmed.
Just FYI, An American in Paris is an "integrated musical." That means that all of the musical numbers are actually part of the movie's narrative. In other words, nobody just breaks into song for no reason while everybody else pretends that some crazy dude didn't just start singing and dancing in the middle of a crowded restaurant.
Jerry leaves the café and heads to Montmartre, passing several other artists along the way. Then he finds a spot on the street and starts laying out his own paintings.
A young American woman approaches and starts critiquing Jerry's art. Jerry rudely tells her to hit the bricks; he doesn't care about her opinion. Meanwhile, Milo Roberts watches from across the street with a smirk.
Milo comes over and asks Jerry if she can have a look—you know, without him biting her head off. Jerry says she's cool; that other gal was a third-year art student—he's just stereotyping her here—and she doesn't know squat about art. Jerry's a real class act.
Milo tells Jerry she wants to buy a couple of his paintings, and Jerry's shocked. He doesn't even know how much to charge for them, so he asks Milo to make him an offer. She does, and he accepts.
Turns out Milo doesn't have enough cash on her to pay for the paintings right now, so she invites Jerry to come back to her hotel with her, so she can pony up the cash.
Jerry protests at first, concerned that the hotel might be far away, but Milo calls his bluff. She knows Jerry wants to get paid, son.
Milo waves and her driver pulls around. Her ride is super-fancy, and Jerry jokes that he should've charged her more.