Three years elapses, and the setting changes to the small town of Lycurgus, in New York, located between Utica and Albany. Clyde’s wealthy uncle, Samuel Griffiths, is about to return from some traveling, and he and his family will be having dinner together. The Griffiths have two daughters, Myra and Bella. Before dinner, seventeen-year-old Bella, the younger daughter, excitedly tells her mother about their friends the Finchleys, who are building a bungalow up at Twelfth Lake that summer. Bella is looking forward to spending much time there with her well-off friends. Her enthusiastic chatter is interrupted by the entry of her brother, the Griffiths’ only son, Gilbert, a rather arrogant young man of twenty-three who is interested only in business success. He pretends not to be interested in Bella’s social gossip but he takes note of it anyway. In reality, he envies the more adventurous Finchley and Cranston families, who represent newer wealth in Lycurgus and create a more exciting social circle than the more established wealthy set in which the Griffiths move.
Samuel Griffiths returns and the family sits down for dinner. Griffiths announces that in Chicago he met his nephew. He has not been in touch with Asa, his brother and Clyde’s father, for thirty years, so he has never before met Clyde. Griffiths met Clyde at the Union League Club, where Clyde is a bell-hop, and had a favorable impression of him. Griffiths reports that Clyde looks rather like Gilbert, which does not please Gilbert, and Gilbert is still more annoyed when his father reveals that Clyde had told him he wanted to advance his career, and he, Griffiths, had told him that if he came to Lycurgus, Griffith might be able to help him. (Griffiths owns the large Griffiths Collar and Shirt Company.) Griffiths tells his family, however, that he has no intention of showing his nephew any special favors. If he is to work at the factory he will be treated just like any other employee.
After fleeing Kansas City, Clyde read in the newspaper that Sparser had given to the police the names and addresses of all the people who were in the car. Thinking that the police would be looking for him, Clyde went from job to job in places like St. Louis, Peoria, Chicago, and Milwaukee. After about eighteen months, he was working as a driver of a delivery wagon in Chicago under the name of Harry Tenet, and finally wrote to his mother, telling her where he was. She replied that the family had moved to Denver, where they had their own mission house. Clyde then by chance meets up with Ratterer, who works at the Union League Club, and Ratterer helps him get a job first at a hotel and then at the Union League Club. Clyde now works under his own name.
Clyde is unhappy because he is nearly twenty-one and is still a bell-hop. When his uncle comes to the club, Clyde takes the opportunity to deliver some letters to his room. This is the encounter that Griffiths describes to his family in the previous chapter. Griffiths later decides that Clyde could start working at the very bottom of the factory, and he writes to Clyde inviting him to come to Lycurgus. Clyde travels to the city full of hope for advancement.
Clyde arrives in Lycurgus and goes straight to the factory to meet Gilbert Griffiths. Gilbert is cool toward him, noting that Clyde has no experience with this kind of work. He decides to start Clyde in what is called the shrinking department, where the material from which the collars are cut are shrunk in order to ensure that the collars themselves, when made, do not shrink. This is the first stage in the manufacturing process. An employee named Whiggam takes Clyde to the shrinking room. Another employee, Mr. Kemerer, explains more about the process. Then in the afternoon, Clyde is free to go; he is to report for work in the morning. He walks around the town and is extremely impressed by the sight of the Griffiths’ house.
Clyde takes a room in Lycurgus and after dinner walks around the town again, excited to be there and to have this connection to the great Griffiths family. Meanwhile, Gilbert reports to his sister Myra and later Bella that he was not impressed by Clyde, complaining that he has no business experience and wondering why he bothered to come to Lycurgus. The next morning Clyde reports for work. Employees treat him with a certain deference because of his name, and over the next few weeks he acclimatizes himself to the work.
Clyde manages to make a fresh start, but his position in Lycurgus is an unusual one. He is both connected and not connected to his wealthy uncle and cousins. He is a Griffiths, and as such is treated with some respect by the employees of the factory, but he is not part of the rich Griffiths’ world in Lycurgus. He lives in one room in a boardinghouse and has the most menial of jobs in the factory. He is still naïve about wealth and position, and what that means for a person. He thinks for example that just because Gilbert Griffiths is in a senior position in the company he must be able to arrive late and leave early. He thinks being wealthy is all about fun and enjoyment, a kind of paradisal world. He still looks on from the outside and dreams, as for example, when he first sees the Griffiths’ house: “Indeed in his immature and psychically unilluminated mind it suddenly evoked a mood which was of roses, perfumes, lights and music. The beauty! The ease!” (chapter V). He is bitterly aware of the contrast between this branch of the family and the poverty and squalor of his own. What he does not yet realize is the rigidity of the class structure he has stumbled upon in Lycurgus. It is a hierarchical world. Samuel and Gilbert Griffiths believe firmly in the class structure: “One had to have castes” (chapter IV). Old wealth (the Griffiths) looks down on more recent wealth (the Finchleys and the Cranstons); and in the factory, employees such as Whiggam and Kemerer show excessive deference to Gilbert Griffiths simply because he is the son of the owner. Clyde will soon find out that his status as the poor cousin will exclude him from the society he longs to be a part of. Clyde’s position is therefore an anomalous one and difficult for him to manage.