Kathy briefly details an event at Hailsham, dating from around the time she was ten, which she calls “the Tokens controversy.” She remarks that, even at that early age, students began getting more acquisitive when it regarded their own things—they wanted to build “collections” of small objects, the only things they were allowed to own at school. These objects were traded for at the sale and the exchange. But because some students had their work taken away by Madame, supposedly for inclusion in the Gallery, before the work could be exchanged to another student, a group of angry students, including a boy named Rory, went to Miss Emily, the headmistress of the school, and demanded tokens in exchange for this work given to Madame.
One of the first indications that the students at Hailsham have trouble with some of the school’s rules. Here, the students challenge the notion of “Exchanges”, and appear to assert their individual rights. But it will become clear, as the novel progresses, that Hailsham students are willing to push the rules only so far—to ask for small guarantees, such as a deferral of donation, rather than a full-blown revolution against their chosen fates. The placidity of the students regarding this fate is one of the novel’s central questions.
Kathy was surprised to learn that Miss Emily was willing to give these students a small number of tokens in compensation for their work. But Miss Emily also noted that having art selected by Madame was “a great honor.” When Kathy and some other students bring up the Tokens later, in a class with Miss Lucy, they find that Miss Lucy wants to discuss the matter with them. But Miss Lucy feels she can only say that Madame takes their art away “for a very good reason,” and that, sooner or later, this reason will be explained to the Hailsham students. This ends the Tokens controversy, as the students no longer feel comfortable discussing it.
Lucy understands the purpose of the art that Madame collects—the art is used as proof of the humanity of Hailsham students, and is, presumably, presented to others in the outside world skeptical of clones’ humanity and therefore rights. Although Lucy’s own politics aren’t exactly clear—and the novel’s political backdrop is indeed mostly hidden from the reader—Lucy does believe that the students should know as much about their fates as possible—that they should be prepared for what is in store for them in their lives.
Kathy also describes, briefly, the sales, which, unlike the exchanges, were held at Hailsham so that students could “buy” (with tokens given by the guardians) objects from “the outside world.” These objects tended to be mundane—scissors, old shirts—but the students clamored over them, and occasionally the guardians would have to “shut down” sales that descended into fighting. On these occasions, Miss Emily would give long speeches to the students of Hailsham, telling them that they are special, and that they ought to behave better and be worthy of their “privilege.” Kathy also notes that, at the time, everyone was scared of Miss Emily, but very few understood what she was saying during these speeches; they tended to be very abstract, and Miss Emily never really explained exactly what made Hailsham more special than other schools.
Miss Emily, as compared to Miss Lucy, has a more abstract approach to informing the students of their obligations. Here, in her “speeches” regarding order and organization during the Sales, Miss Emily seems to be instilling in the students the idea that they ought to follow the rules, and be calm and obedient throughout their lives. As Miss Emily (rightly) believes, this idea of order and obligation will encourage the students to become rule-abiding carers and donors. It is insinuated, however, that this kind of gentle socialization—which in another context might be called “brainwashing”—is not fair to the students, or perhaps treats them with less honesty than they deserve.
Kathy also recalls becoming friends with Ruth. At first, when they were very young, around age “5 or 6,” the two had very little interaction, but a few years later, Ruth asked Kathy one day if Kathy would like to “ride horses” with her. Ruth said she had two horses, one named Thunder, and another, quieter one named Bramble. Kathy agreed to ride these (invisible) horses with Ruth, and the two went to one of the playing fields and pretended to ride for a long time together. After this, the two became friends, and Ruth told Kathy that she could enter into the group of girls who were “protecting” Miss Geraldine. Kathy leaves this story till the next chapter.
In some ways Kathy and Ruth's make believe here is representative of their entire lives—their entire existence within Hailsham is a kind of make-believe, as are the lives they hope to have. It is all just imaginary, as they will end up being carers and then donors, and the organ donations they make will end up killing them. That Ruth is the initiator of this play also signals that she wants this normal world that she is kept apart of more than the other clones. But it's also important to note that this fantasy play is also perfectly normal, it's what kids do, and so the clones are both not like other humans and just like other humans at the same time.