In the pressroom they're reading Hildy's story about Williams, which they think is tops.
Hildy stomps in and calls Walter and tells him he's a scumbag ("If I ever lay my eyes on you again, I'll hammer your skull so it rings like a Chinese gong!")
She tears up her story.
Cut to the sheriff's office: Egelhoffer is getting ready to interview Earl.
And back to the pressroom. Hildy's leaving; she seems much less upset, and razzes the other guys about how they still have to work.
There are shots fired, and everyone rushes to the window. Earl Williams has broken out of jail.
All the guys rush to the phones to report to the paper. Hildy calls Walter to tell him Williams just escaped (she seems to have forgotten that he's a snake and a rat and a baboon and that she'll hammer his skull, etc.).
She rushes out to get the story. Outside she chases after the warden and tackles him.
Back in the pressroom, the newspaper guys call into various papers.
Williams escaped, and the Sheriff's police force (largely composed of his relatives) have accidentally dropped tear bombs on themselves. They've also shot a cleaning lady.
The Sheriff comes in, is cranky, and then leaves with everyone else.
Hildy comes in, shuts the door, and calls Walter to tell him that Earl got the gun to escape from the Sheriff, who handed it to him because the psychologist wanted to recreate the crime.
The Sheriff isn't the sharpest tack in the box.
Hildy says she had to pay the warden almost all of Bruce's money to get the story. She tells Walter he has to pay her back.
He says sure.
But he sounds mighty shifty.
Hildy tells Walter to send over the money right away, because Bruce is waiting in a taxi cab.
Walter has Evangeline, a very blonde moll, in his office. He tells her to go get Bruce in trouble.
Then he tells Louie to go give Hildy counterfeit money.
Cut back to the pressroom; Hildy takes a call.
It's from Bruce. He says he's been arrested again; this time for mashing.
Evangeline is in the background looking very blonde and smug.
Hildy can't go to the precinct right away because she's waiting for Walter to send her the money he owes her.
The Mayor (named Fred) comes in; the press tries to get him to tell them what happened with the Williams escape, but he won't say anything.
Sheriff Hartwell comes in.
One of the reporters has a statement from the Governor, who says the Mayor and the Sheriff are incompetent and should be tossed out on their ears in the upcoming election.
The newspaper guys also taunt the mayor and sheriff a lot about the red menace.
Worries about Communism were prevalent at the time. (The suggestion is that the politicians are using the red menace as a way to stir up voters.)
The Sheriff says he's located Williams; the newspaper guys rush out.
The Mayor tells the Sheriff he wants to talk to him.