Two weeks after Lily’s return from Europe, she joins her entire family gathered in Mrs. Peniston’s house after her aunt’s sudden death. Although Mrs. Peniston disapproved of Lily’s trip with Gus and Bertha Dorset, refusing to write to the young girl during that period, Lily is relieved to know that she will finally receive her aunt’s inheritance and be able to repay her debts.
Mrs. Peniston’s behavior toward Lily once again reveals that she cares about Lily’s social reputation before her emotional well-being. By contrast, Lily is concerned with another kind of moral issue, repaying her debts, which shows that she is primarily concerned with behaving in an honorable way—not with what people say about her.
Everyone present believes that Lily will receive her aunt’s 400,000 dollars. However, when the lawyer reads Mrs. Peniston’s testament, Lily receives only 10,000 dollars, whereas Grace Stepney inherits all of Mrs. Peniston’s estate. Despite Lily’s utter shock, no one seems to pay attention to her except Gerty Farish. After the family members all leave, the two of them are left alone.
Lily’s family’s utter lack of interest in her fate reveals that, in the public as well as the private realm, members of high society are so obsessed with money that they fail to invest in relationships in any meaningful way. By contrast, Gerty Farish, who cares very little about money, is the only one who actually worries about Lily’s well-being.
Lily and Gerty then go to Gerty’s apartment, where Gerty decries how unfair Mrs. Peniston’s decision is. However, Lily, who has learned that the testament was redacted recently, is convinced that Mrs. Peniston wrote it after learning of Lily’s separation from George and Bertha Dorset. Lily insistently asks a reluctant Gerty to tell what is being said about her, because she needs to know if her friends will all turn away from her.
Gerty, who lives in a world where social climbing matters very little, does not understand how Mrs. Peniston could be so callous. Lily, by contrast, knows that in her milieu people’s reputations are the only thing that counts, and thus understands the logic behind Mrs. Peniston’s act, which signals that her love and generosity are proportional to Lily’s reputation.
Although Gerty cannot believe this could happen, Lily simply replies that Gerty is her only true friend at this moment. Lily adds that she cares less about her friends’ rejection than she cared about receiving her aunt’s money, but Gerty argues that she should care about her friends and simply tell them the truth about what happened in Europe. Lily, however, cynically replies that Bertha’s version of the story will always matter more than hers, because Bertha has more money and power.
Gerty’s belief in truth and justice contrasts with Lily’s understanding that, in her world, only wealth and power matter: it is the most influential, powerful people who determine the dynamics of high society, without following any fixed rules or principles. Lily’s desperate desire for money highlights the quasi-interchangeable nature of money and so-called “friends” in high society, as both are necessary for power and survival.
When Gerty insists that Lily recount her version of the story, Lily grows impatient, saying that, if she had to start from the beginning, she would start with her upbringing or, perhaps, her very blood, which are responsible for her attraction to money and pleasure. The truth, Lily concludes, is simply that when rumors are started against a woman, her social future ends, and trying to provide explanations only makes things worse.
Lily argues that she was never given the freedom to determine her own values and the way in which she wants to live her life. Instead, she has been conditioned from the very moment of her birth to feel as though the only environment she belongs in is one of superficial pursuits, moved not by fairness and honesty but by social whims. Instead of fighting against this, she seems resigned to accept it as fate.
That evening, at the hotel room where she is staying, Lily tries to reexamine her situation, realizing that she is completely alone, except for Gerty Farish. After her separation from George and Bertha Dorset, Lily spent a few weeks in London, where, supported by the Duchess of Beltshire, she integrated into a social circle that highly admired her. When she finally returned to the United States, weeks after her separation from the Dorsets, she realized that everyone else had already given their version of the story, and that Lily could no longer say anything credible. A mix of pride and humiliation further kept her from trying to defend herself. She simply accepts that she took a risk in going on a trip in which her only role was to distract George Dorset from his wife’s infidelity.
Despite claiming that she has had no freedom in forming part of high society, here Lily shows both resignation and defiance. Lily’s refusal to defend herself derives in part from the conviction that she can do nothing to change her fate, but also from a cognizant decision not to invest her energy in a system that is inherently unfair. Her refusal to tell her story functions as an implicit condemnation of a system in which a person’s reputation can ruin their life, yet depend on nothing more than pure fabrication. Lily’s willingness to accept partial responsibility for what has happened shows that she knew she was sacrificing ideals of justice to the base dynamics of society, yet agreed to do so.
Lily nevertheless decides to stay in New York, hoping that Judy Trenor at least might show some kindness toward her. However, when she comes across a group of women led by Judy and Carry Fisher, the two women appear embarrassed to see Lily and behave curtly toward her, which Lily knows to interpret as outright rejection. Lily concludes that Judy probably knows about Gus giving her money, a practice that Lily knows Judy has always disapproved of.
The cold behavior that Lily’s so-called friends demonstrate toward her reveal high society’s hypocrisy, as people prefer to follow dynamics of power (under the guise of following moral principles) instead of obeying higher ideals of compassion, loyalty, and honesty, which should be expected from true friends.
This interaction only heightens Lily’s desire to repay her debt to Gus. However, after writing to her aunt’s lawyer, Lily learns that she might need to wait one year to receive her inheritance. As a last recourse, Lily thus decides to ask Grace Stepney if she might be willing to advance her inheritance money for her. However, Grace bluntly refuses, noting that Mrs. Peniston’s knowledge of Lily’s debt caused her to fall ill. Grace concludes that her role is not to give Lily money, but to scold her as Mrs. Peniston would have done.
Under the guise of moral condemnation, Grace Stepney’s attitude toward Lily can be seen as a continuation Grace’s hostile attitude toward Lily, ever since Lily kept her from participating in a fancy dinner. In this case, following principles of morality and social decorum only means acting cruelly and condemning a vulnerable young woman to deep financial troubles.