As time goes on, David becomes less hopeful that little Em'ly will ever be found (at least alive). Mr. Peggotty, however, is as certain of finding her as ever, despite the fact that Martha's messages to him have never led to anything. He even travels to Naples to try to learn more about his niece's whereabouts, and David finds his devotion touching. Mr. Peggotty also becomes a favorite of Dora, and he pays frequent visits to David's house.
Mr. Peggotty's single-minded determination to find little Em'ly makes him a model parent in the novel. Although his love for his niece is clearly as deep as Mrs. Steerforth's for Steerforth, it isn't possessive in the same way. In fact, as Mr. Peggotty's long and difficult journey demonstrates, his love for Emily is entirely selfless.
On one of these visits, Mr. Peggotty tells David that he has seen Martha recently, and that she told him not to leave London in the near future. David says nothing, not wanting to give Mr. Peggotty false hopes Two weeks later, though, David is again walking in his garden when he sees Martha on the road next to his cottage. She asks him to come with her, explaining that she left a message for Mr. Peggotty with instructions on where to meet them. David agrees and hails a coach, which they take to central London. Martha refuses to say anything on the way, but leads David to a street full of rundown and overcrowded houses when they arrive. They enter one of these buildings, which still bears traces of its former lavish decorations, and climb to the top floor.
According to David, the neighborhood where Martha takes him was at one point full of "fair dwellings in the occupation of single families" that have since "degenerated into poor lodgings let off in rooms." This description echoes one common criticism of poverty in the nineteenth century, which was that it had a destructive effect on the nuclear family; here, for instance, houses have been divided up in such a way that people unrelated to one another are sharing close quarters, while families might be sharing single rooms. Critics of this sort of housing often claimed that the cramped conditions encouraged sexual misconduct, so it's significant that Martha is one of the building's tenants.
As David and Martha reach Martha's room, they see a woman enter before them. David recognizes her as Rosa Dartle and, hearing voices inside the room, he and Martha go around to a back door, where they pause and listen in on the conversation. Rosa says that she has come to see the other speaker, whom David realizes, by her voice, is little Em'ly. Rosa continues, saying she wants to know what kind of woman Steerforth ran off with, and there is a scuffle as Emily tries to leave the room and Rosa stops her. Emily is obviously terrified by this point, but David doesn't feel he has a "right" to intervene, and simply wishes Mr. Peggotty would arrive.
David's decision not to intervene reflects the delicacy of the situation; because of the shame Emily presumably feels, David considers it inappropriate for anyone but her family to intervene. With that said, David may also be holding back out of lingering feelings of resentment towards a woman who in some sense rejected him.
As Rosa continues to taunt little Em'ly for her "mock-modesty," Emily begs her to show her some mercy on account of their shared womanhood. Rosa scoffs at this, and goes on to describe Emily as a seductress and a "purchased slave." She has no sympathy for Emily's pleas and expressions of remorse, and asks whether she "ever thinks of the home [she has] laid waste." Assuming that Rosa means Mr. Peggotty's home, Emily says she thinks about it constantly and with shame. This angers Rosa, who mocks the idea that the Peggotty's home could fall any lower, describing Emily as "a part of the trade of [her] home, [who was] bout and sold like any other vendible thing."
Rosa's repeated descriptions of Emily as a "bold" seductress are clearly at odds with Emily's actual behavior in this scene, which is frightened and meek. This discrepancy is partly a result of Rosa's jealousy, but it also serves to make Emily more sympathetic by way of contrast, which is important given the prejudices a nineteenth-century reader would likely have had towards her. However, while Dickens' sympathies clearly lie with Emily, Rosa does make an interesting point about home and family life. In effect, Rosa questions the idea that the home is entirely separate from the public sphere; instead, she suggests that each member of a family like Emily's is valuable as a source of income.
Emily begs Rosa not to speak of her family so disrespectfully, but Rosa simply ignores her, saying that she was talking about Steerforth's home, and the rift little Em'ly ("this piece of pollution") has caused between Mrs. Steerforth and her son. Emily protests that she never meant to cause them any harm, saying she was well brought-up and that Steerforth played on her innocence and love for him. The mention of love, however, enrages Rosa further: she nearly strikes Emily, and then says that she ought to be whipped for daring to mention love. She continues on sarcastically, saying that she did not expect to find Emily "true gold, a very lady," and that she therefore urges her to seek out an "obscure death," if her "loving heart will not break" otherwise.
Although it's obviously untrue, Rosa's claim that Emily is solely responsible for the breakup of the Steerforth family reflects widely held nineteenth-century beliefs about fallen women—namely, that they posed a threat to the nuclear family. There were widespread fears, for instance, about men who had visited prostitutes passing on sexually transmitted diseases to their families. Meanwhile, Emily argues that her family is equal to Rosa's in terms of feeling and virtue—in other words, that love, rather than financial considerations, is what binds them together. Interestingly, she makes this point by claiming she was "brought up as virtuous as […] any lady." Given her earlier desire to become a lady, this perhaps signals a new contentment with her position in life, since it suggests that it's possible to be a "lady" in moral terms rather than in class ones.
Rosa warns little Em'ly that if she doesn't leave this house immediately, she will tell everyone about Emily's past. Furthermore, she will do the same elsewhere if Emily ever tries to pass herself off as a respectable woman. Sobbing, Emily asks what she is supposed to do, while David wonders desperately where Mr. Peggotty is. Rosa, however, is unmoved, and tells Emily to "live happy" in her memories of Steerforth's "tenderness," to marry Littimer, or to simply die. She then reiterates her intention to have little Em'ly "cast out" of decent society.
Ironically, Rosa's suggestion that little Em'ly "consecrate" the remainder of her life to Steerforth's memory foreshadows what will become of Rosa herself; after Steerforth's death, she continues to live with Mrs. Steerforth, apparently bound to the household by her own bitterness over the past.
As Rosa is speaking, David hears footsteps on the staircase, and Mr. Peggotty rushes into Martha's room as Rosa leaves it. David sees him catch little Em'ly as she faints, and cover her face with a handkerchief. He then thanks God for bringing him to Emily and carries her out of the room.
Mr. Peggotty seems to cover Emily's face to shield her from David's gaze, recalling David's earlier reluctance to enter the room and see Emily face to face. In fact, David only sees Emily once more before she leaves the country, and then only from a distance.