When the ground softens, Lily's family prepares Grandmother and Third Sister for burial. Funerals are one of the most expensive life events, and Lily sees how poor her family is. The family burns Grandmother's third-day wedding books, and nothing is said about Third Sister.
Lily's fixation on her family's poverty provides a counterpoint for her later social advancement. The third-day wedding books are burned so that Grandmother has them in the afterlife. This begins to paint a picture of the purpose of language.
The most painful part of foot binding is over, and Lily and Beautiful Moon spend their days sitting and working on their house learning and nu shu. Madame Gao, the local matchmaker, begins visiting to negotiate “Contracting a Kin” (the first step of arranging a marriage) for Elder Brother and Elder Sister. Elder Sister will marry out to a better family in a faraway village, but Lily's family practices buluo fujia, or a wife not leaving permanently for her husband's home until she is pregnant.
The custom of buluo fujia is an early example of the ways that customs and traditions can provide a great deal of comfort for some people. Lily returns to this custom in particular many times, and sees it as a very positive thing. This positive view on tradition is something she carries over into other traditions—but she won't consider that tradition isn't always comforting for everyone.
In late summer, Elder Sister's sworn sisters meet at Lily's home for Bull Fighting Day. They beg Aunt to lead them in the call-and-respond "Story of the Woman with Three Brothers." Lily and Beautiful Moon follow the nu shu writing of the story on a handkerchief in Aunt's lap. The story details the tragedy of a woman whose three brothers cannot provide a dowry, so she hangs herself. The brothers care for her body, select a coffin, and choose an appropriate burial spot, and the woman finds happiness in the afterworld. The story provides instruction on how to care for a dead loved one.
While the story here certainly provides instruction on caring for the dead, it also reinforces the idea that marriage is an extremely important and necessary achievement for a woman—the woman of the story would rather take her own life than live unmarried. Because Lily doesn't appear to pick up on this fact, it alludes to the idea that these societal traditions and pressures are so entrenched that they're not worth questioning. It also points back to Mama and Aunt's decision to continue binding Third Sister's feet.
The following day, Madame Wang visits. Lily feels pressured to make a good impression, as her family needs the money that her good marriage will bring. Madame Wang states that she already has interest for Lily in Tongkou, but today she'd like to discuss contracting Lily's laotong relationship with a girl in Tongkou named Snow Flower. At Mama's questioning, Madame Wang says that the girls' eight characters (birthdate, height, birth order, etc.) align well, but they don't match completely in that Snow Flower's family is of greater economic standing.
Again, Lily is very aware that her family is poor and is depending on the financial benefits they'll receive if she can make a good marriage. Lily here introduces the idea of the eight characters, which influence how well two people are supposed to get along. Lily and Snow Flower are somewhat unconventional, as their characters are off by one.
Mama indifferently says that Lily is stubborn and disobedient. Lily is hurt to hear this, and doesn't understand that by talking about Lily as though she's unworthy, any fees to her family may be less. Madame Wang calls Lily to her and gives her a fan, waving away Mama's concerns about a fee. Before she leaves, Madame Wang addresses Aunt and says that Lily's laotong relationship may make it possible for Beautiful Moon to also marry into Tongkou. Her final advice is for Mama and Aunt to use "bed time" to convince their husbands to agree to the laotong relationship.
Lily is trying her hardest to make the best impression she possibly can, so she can't understand why Mama would undermine her like she does. Mama's concern about the fees involved in this relationship again indicate that women are little more than currency in this society, and Madame Wang reinforces this by suggesting that Lily's worth will raise Beautiful Moon's worth as well. Also note the euphemistic term for sex here, and how the women use sex as the only leverage they have over their husbands.
Mama and Aunt walk Madame Wang to her palanquin (a litter carried by four men) while Lily, Beautiful Moon, and Elder Sister chatter excitedly. Elder Sister asks what the fan says, but Lily can't read all the nu shu characters running down the first fold. Aunt returns and reads the note aloud, which is an invitation to be "sames." Lily cannot reply until her family decides what to do. Aunt advocates for the laotong relationship, repeating each time that a laotong relationship is one of emotional companionship, while a marriage exists only to have sons. Mama argues that women in their family have sworn sisters, not laotongs, and Aunt notes that Lily's laotong will be beneficial to both Lily and her family.
Sworn sisters are a group of women in the same stage of life who are contracted to be friends and support each other, but the group is dissolved when they marry or grow old. A laotong relationship, on the other hand, lasts for life (and supposedly even for eternity). Notice that marriage here is described as something transactional and entirely unemotional. This idea will be questioned throughout the novel, and even now as Lily remarks occasionally how happy Aunt and Uncle seem to be as a married couple.
Lily's family decides to accept the laotong relationship. Mama helps Lily embroider shoes to send to Snow Flower as a first gift, and Aunt helps Lily compose a nu shu reply. Lily decides to not send her reply on a different fan, as is customary, but rather to send it back on the same fan. The note is composed of conventional phrases of everlasting commitment. Lily notes that she certainly didn't mean all that she wrote, as she was only seven and knew little about everlasting commitment, but she hoped it would come true.
Lily's decision regarding the fan is the first time she actively chooses to break with what tradition dictates should be done. This is mirrored by her family's decision to accept the match, as it's not traditional for their family. The note, however, is described as being as conventional as possible. This begins to create tension as Lily uses language to simultaneously conform and resist tradition.
When Lily is finished with the fan and the shoes, she worries that Snow Flower's family won't accept the relationship. When Madame Wang sees the fan, though, she states that it's a perfect match and that the girls are alike in their “horse” spirits. She offers to take Lily and Snow Flower to the Temple of Gupo fair to write their laotong contract, and takes the fan and the shoes to give to Snow Flower.
Remember that individuals born in the year of the horse are said to be free spirits, and here Madame Wang ascribes Lily's unconventional decision to proof of this spirit. This moment will stand as one of the few times in the novel that Lily truly receives positive feedback for breaking tradition (but, of course, it’s not a serious “rebellion” at all).