David agrees to stay until Mr. Barkis is buried (in the same cemetery as Clara Copperfield). He also helps Peggotty and exercises his professional skills by reading and interpreting Barkis's will, which he finds in the box Barkis always kept by his bed. As it turns out, this box also contains several hundred pounds and a few valuable items, including a gold watch. In total, Barkis has saved nearly 3,000 pounds, which he divides in his will between Peggotty, little Em'ly, and David; he also bequeaths the interest on 1,000 pounds to Mr. Peggotty. Dealing with this business keeps David preoccupied for the week leading up to the funeral, during which time he does not see Emily. The funeral itself is small and quiet, and gives David a chance to place some leaves on his mother's grave.
3,000 pounds was a substantial amount of money in the early 1800s; to put it in perspective, Dickens later indicates that the comfortably well-off Miss Betsey has roughly 8,000 pounds (not counting the cottage she owns). The fact that Barkis managed to save this money is a testament to his hard work, discipline, and—most of all—his love for Peggotty and desire to provide her with a good life. It's also interesting that he chose to leave some of his money to David and Emily; it's possible Barkis sees them as family, particularly since he had no children of his own.
David pauses his narrative, saying that he is afraid to recount the events that followed the funeral. Although he realizes that his writing cannot change what has happened, he feels as though proceeding will make it "come again."
David's remarks here speak to the ways memory and narrative intersect in the novel. On the one hand, telling his own story gives David a measure of control over events that might have been out of his control at the time; he can, for instance, choose to depict them in a particular light. There are obviously limits to this control, however, since David can't change the bare facts of what has happened.
Everyone arranges to meet at Mr. Peggotty's the night of the funeral. The weather is "wild" when David arrives that evening, but Mr. Peggotty and Peggotty are already there preparing the house for visitors and usher him in. David asks how Peggotty is, and Mr. Peggotty says she can take comfort in the fact that she and her husband "did their duty" by one another. Mrs. Gummidge is as grumpy as usual and complains that the Peggottys would be better off without her. Mr. Peggotty attempts to cheer her up while setting a candle in the window—a signal he uses to let little Em'ly he's at home. Peggotty teases her brother for being so attached to Emily, and Mr. Peggotty agrees that he is, talking about how much pleasure he takes in visiting Ham and Emily's future home; all the objects in it remind him of his niece.
In the moments leading up to Emily's disappearance, David lingers on images of the family life that's about to be thrown into chaos. Peggotty's marriage to Barkis is likely the kind of marriage Mr. Peggotty envisions Emily and Ham sharing—a relationship that's not especially passionate, but that's comfortable and responsible. However, there have already been many hints that the marriage isn't meant to be, and in this passage, Dickens provides another: although Mr. Peggotty imagines he sees Emily's touch at work in the cottage she and Ham are to share, it sounds as though Ham is actually responsible for the majority of the furnishing. Emily's apparent disinterest in the house that will be her home is another sign of her resistance to the marriage.
Mr. Peggotty sees someone coming: it's Ham, but he is not accompanied by little Em'ly. Ham asks David to step outside so that he can show him something, and David notices that Ham looks very pale. Once outside, David asks Ham what's wrong, and Ham eventually says that Emily has run away, and that it would be better for her to die than to face the "ruin and disgrace" she now will. Ham then asks David's help in breaking the news to the rest of the family, but Mr. Peggotty appears before David can respond and—realizing that Emily is not there—lets out a wail.
Ham's remark that Emily would be better off dead is likely to strike modern readers as cold. In the cultural context of the time, however, it's a selfless wish, as well as a reminder of just how serious the consequences could be for a woman who flouted sexual norms. Despite his own personal feelings for Emily, Ham would rather see her dead than reduced to poverty and even prostitution.
Back inside, David reads aloud a letter Ham gave him. It's from Emily, and explains that she is already "far away" from her home and Ham, whose love she says she never deserved. She doesn't intend to come back unless "he" makes her "a lady," and she asks Ham to convey her love to Mr. Peggotty and to think of her as dead—or "so bad" that her departure is no loss.
Emily's motives for running away with Steerforth are somewhat obscure. It's not clear whether attraction to Steerforth, the desire to be an upper-class lady, or simply the need to escape her impending marriage to Ham was the most important factor. It is clear, however, that Emily considered herself an improper woman even before her affair began, since she claims not to deserve Ham. Regardless, she expresses deep shame over what she sees as her failures as a woman.
Mr. Peggotty seems dazed, although he does try to comfort Ham. Eventually, he asks who the man is that Emily has run away with, and Ham asks David to step outside. David remains, however, slowly realizing the truth as Ham explains that a servant (Littimer) and a gentleman have frequently been seen in the area, most recently with a horse and carriage. Ham assures David that he isn't responsible, but that Steerforth is the man he's talking about.
It's clear from David's reactions throughout the scene that he half-suspects Steerforth of having seduced little Em'ly: he feels "shock" long before Ham explicitly reveals the man's name, but is apparently unwilling to consciously entertain the idea. This reluctance probably stems in part from his feelings for Steerforth, but it also speaks to David's own guilt: by introducing Steerforth to the Peggottys, David unwittingly made the affair possible.
Mr. Peggotty finally rouses himself and prepares to leave: he plans to go knock a hole in Steerforth's boat since he can't "drown" the man himself, and then set off in search of little Em'ly. Mrs. Gummidge, however, begs him not to leave now, but to sit down for a while so that they can reminisce about Emily and Ham as children. This, she says, will help him "bear his sorrow better." Mr. Peggotty does as she suggests, and David—who had previously wanted to beg for the family's forgiveness—begins instead to cry with everyone else.
Mrs. Gummidge's suggestion is striking, because it almost makes it sound as though both Ham and Emily have died. In Emily's case, this makes some sense, given the prevailing wisdom about the fate of fallen women. In Ham's case, it perhaps foreshadows the fact that Emily's jilting of him does indirectly lead to his death, though not for several more years. Regardless, Mrs. Gummidge's suggestion also highlights the importance of memory in the novel by suggesting that recalling happier times can be a way of coping with the present, and even gathering strength for the future.