Franklin implores Betteredge to stay seated and declares that he has a story to tell. Betteredge dislikes Franklin’s moustache and beard, his “lively” but not “free-and-easy” disposition, and his unexceptional stature. At least his eyes remind Betteredge of the boy he used to know. Franklin explains that a “dark-looking stranger” had followed him the last few days, and Betteredge immediately thinks of the Indian jugglers who passed by earlier that day. Franklin asks about these jugglers, whom Penelope mentioned to him earlier. Franklin mentions he finds Penelope quite attractive, much more than her mother (and Betteredge agrees). They return to discussion of the Indians, and Franklin pulls out a parcel to reveal the mysterious “It” the men were talking about: the Diamond, originally owned by Franklin’s uncle “the wicked Colonel” Herncastle, who has sent Franklin to bring it to Rachel as a birthday present.
Betteredge immediately sizes Franklin up, making a holistic and seemingly definitive assessment of the man that, nevertheless, he will soon abandon—this again demonstrates the comical contradiction between Betteredge’s self-assurance and suggestibility. And Betteredge’s narrow standards for masculine respectability, to the modern reader, look like a caricature of British narrow-mindedness—indeed, Betteredge’s skepticism toward Franklin clearly has something to do with Franklin’s apparent foreignness after living most of his life in Europe. The reader learns that the Indians’ appearance does definitively have to do with the Diamond, and that (given the man following Franklin) they are likely more sinister than Betteredge initially imagined.
Betteredge is astonished at Franklin’s revelation—and most of all the fact that Franklin’s father became Herncastle’s executor. But Franklin says he has more information and asks Betteredge why he called Herncastle “the wicked Colonel.” Betteredge obliges and reproduces his explanation in his narrative—but warns the reader to pay close attention. He explains that Julia and her sisters also have two older brothers, Arthur (who inherited the family’s property) and “the Honourable John,” who was a total blackguard (a scoundrel) and got kicked out of the Army at 22. In India, he participated in “the taking of Seringapatam” and switched from one regiment to another, and then another. When he returned, the whole family shunned him for his lack of character, and for the rumors about him—the most notorious being his alleged possession of the Diamond, which he never admitted or showed to anyone. Nobody truly knows why.
The novel now turns to a narrative-within-a narrative recounted by Franklin Blake, who is in fact the novel’s compiler. The layers of reported speech in this section demonstrate the novel’s complex relationship to evidence: it is already clear from Betteredge’s story thus far that The Moonstone’s narrators are far from reliable. Herncastle’s nickname, “The Honourable John,” was also a common name for the East India Company that ruled for the British crown until just a few years before this novel’s publication. Collins is clearly drawing a parallel between John Herncastle’s abuses and those of British colonial rule in general.
It is, however, suspected that John Herncastle’s two death threats in India and ostracism in England had something to do with the Diamond. And yet he refused to give it up. The family only knew him through rumors about his “solitary, vicious, underground life.” Betteredge only saw him once more, when he showed up unexpectedly for Rachel’s birthday two years before Franklin’s return. He asked Betteredge to send Julia his best wishes, and Betteredge was frightened enough by his “devilish look” to comply. Julia told him to tell John she would refuse to see him; when Betteredge told him, John laughed “in a soft, chuckling, horridly mischievous way” and left. 18 months later, the family received word that John had died and forgiven his whole family—although Betteredge still thinks this must have been a sinister act.
Franklin reveals that Herncastle was never the same after stealing the Diamond. Strangely, there is no mention of the cousin who wrote the Prologue, who seems to have faded into anonymity. The family’s reasons for isolating itself from Herncastle are just as inexplicable as this disappearance and Herncastle’s change in personality, and it seems undeniable to the attentive reader that this has something to do with the Moonstone’s “curse” (whether it is magical, or a metaphorical way of describing the threats to the gem’s safety or paranoia that accompanies wealth).
Franklin is intrigued by Betteredge’s story, but before offering his own perspective, he poses three questions: was there a conspiracy about the Diamond in India, has this conspiracy come to England, and is the Colonel using this conspiracy to scorn Julia? Betteredge is shocked and wonders if it was possible for their “quiet English house [to be] suddenly invaded by a devilish Indian Diamond—bringing after it a conspiracy of living rogues, set loose on us by the vengeance of a dead man.” Mr. Franklin notices Betteredge’s discomfort and asks, “What do you want?” His pipe and Robinson Crusoe, Betteredge admits to the reader.
Like any classic detective figure, Franklin—who soon takes on that role more extensively—turns an amorphous mystery into a concrete question, and in the same breath offers another possible interpretation of the Moonstone’s curse: the “conspiracy” of Indians seeking to repatriate their gem. Betteredge’s image of the “quiet English house […] invaded by a devilish Indian Diamond” again plays on anxieties about foreignness and national purity, something he tries to assuage with symbols of Britishness (the classic British novel and addiction).