Sir Peter, Sir Oliver, and Rowley sit in Sir Peter’s house and discuss how Sir Oliver can test his nephews’ characters. Rowley says that he knows that Mr. Stanley, a relative of the Surface brothers on their mother’s side, has fallen into ruin and been thrown into debtor’s prison. He has written to both brothers to ask for their help paying his debts, but while Joseph has only vaguely promised to help in the future if he can, Charles is currently trying to raise money for him.
Testing how each Surface brother responds to a poor relative will allow Sir Oliver to understand if they are moved by pity to act generously. Because Mr. Stanley is related to the Surfaces, how hard they try to alleviate his poverty will also be a measure of how much they care for the family’s reputation.
Rowley says he will tell the two brothers that Stanley has been given permission to leave prison to ask for their help in person. Since Joseph and Charles have never met Stanley and do not remember Sir Oliver, Sir Oliver can pretend to be Stanley and judge the Surface brothers’ characters based on how they treat their impoverished relative. Rowley predicts that Sir Oliver will find Charles to be generous despite all his extravagant spending, but Sir Peter scoffs at this, saying there is no point in generosity if one has nothing to give.
Rowley knows that this will be a test that Joseph is likely to fail and Charles to pass. Sir Peter only belittles Charles’s ability to help anyone given the extent of his debts, but does not comment on whether Joseph will be generous. Sir Peter has also refused to give family members money that he can afford to part with: this is often the reason that he fights with Lady Teazle.
Rowley tells Sir Peter and Sir Oliver that he has also arranged for them to meet with a Jewish moneylender, Moses, who can give them a sense of Charles’s financial position. Rowley says that Moses has “done everything in his power to bring your nephew to a proper sense of his extravagance.” Rowley adds that they can trust Moses to tell them the truth, because Moses understands he will never get the money he lent Charles back without Sir Oliver’s help. Additionally, Rowley says he plans to show Sir Peter that he is mistaken in his suspicions about Charles and Lady Teazle by bringing in Snake, whom he has caught forging letters. Sir Peter dismisses this.
The Jewish moneylender is portrayed as believing in principles that stand in opposition to those Sir Oliver hopes to see in an heir. The moneylender has little respect for the Surface’s family name, and does not care that his own name and religion are associated with greed. Rowley suggests that Moses has shown Charles his own extravagance by charging exorbitant interest rates. This debt will test the family name, as Charles will only be able to pay them off with Sir Oliver’s assistance.
Moses enters. Sir Oliver says he hears that Moses has done business with his nephew, and Moses says he has, but Charles was ruined before he ever turned to him. Sir Oliver says this meant Moses “had no opportunity of showing your talents.” Moses tells them that he plans on introducing Charles to a broker named “Mr. Premium” who may lend Charles money. Sir Peter suggests that, since Charles has never met Mr. Premium, Sir Oliver can pretend to be the broker and get a sense of his nephew’s character in this way. Sir Oliver likes this idea and says he will go afterwards to visit Joseph in the guise of Mr. Stanley. Rowley says that this may not show Charles in the best light, but agrees.
Sir Oliver suggests that Moses’s talent, and the talent of Jews in general, is for ruining young people financially by getting them to sign onto loans that have terms that are impossible to fulfill. Sir Peter, who is prejudiced against Charles, suggests that Sir Oliver take the guise of Mr. Premium so that he can see Charles at his worst. Now Sir Oliver will be able to test the two brothers’ reputations: Joseph’s reputation for fine moral sentiments and Charles’s reputation for unthinking extravagance.
Sir Oliver asks how he will be able to pass for a Jew, but Moses replies that Mr. Premium is Christian. Sir Oliver says that is a shame, and then asks if he is too well dressed to be a moneylender. The others tell him that Charles would not suspect anything even if “Mr. Premium” arrived in a fancy carriage, so long as he asks for huge amounts of interest: at least forty or fifty percent, and as much as double, if Charles seems desperate. Sir Peter suggests that Mr. Premium should complain to Charles about the Annuity Bill, a bill then passing through Parliament which made it illegal to lend money on an annuity to those under 21. Moses and Sir Oliver leave to go see Charles.
High society gentlemen like Sir Oliver prefer to see themselves as very different from Jewish moneylenders like Moses, so the knowledge that Mr. Premium is Christian makes him uncomfortable. Yet as a colonial trader in the East Indies, Sir Oliver’s methods for making money likely involved a great deal of exploitation and much less regulation than the Jewish moneylenders who were demonized throughout British society at the time—but the play, of course, does not address this double standard.
Rowley leaves to fetch Snake and Sir Peter says to himself that he hopes there is no affair between Charles and Lady Teazle. He plans to speak to Joseph about his suspicions. Maria approaches and Sir Peter asks her if she has changed her mind about marrying Joseph, and she says there is no one she would rather marry less. Sir Peter says he can see that Maria is attracted to Charles’s wickedness. Maria contradicts this, saying she has been convinced that Charles is unworthy of her, but still pities him and will never marry his brother. Sir Peter says that, as her guardian, he can force her to marry Joseph. Maria says she will not let him force her to be miserable and runs from the room.
Sir Peter believes he is looking out for Maria’s best interest, but is instead threatening to force her to marry the man who is trying to seduce his own wife. Maria has heard things about Charles that she feels make him an ineligible match for her, although she does not specify which rumors have convinced her of this. Still, she does not trust Joseph. The fact that Joseph is courting her despite her relationship with his brother Charles reveals to her, as it does not to Sir Peter, that his moral compass is skewed.
Lady Teazle enters and Sir Peter says to himself that he would be happy if he “could tease her into loving me, though but a little!” Lady Teazle asks Sir Peter to be good-humored and give her two hundred pounds. He exclaims at this, but says that if she is sweet to him, he will refuse her nothing. He also says that he plans to give her an independent source of money, but hopes they will stop fighting. She agrees, so long as he admits that he became tired of fighting before she did. In the future, he says, they will compete to see who is nicest to the other. They reminisce and each says the other is acting as he or she did during their courtship. Sir Peter remembers her kindness to him, and she agrees, saying she always stuck up for him when her acquaintances made fun of him.
Sir Peter wants to stop fighting with his wife and be able to express his love for her. Their fights are generally about how much money he will give her and about who is in the right—and Sir Peter has now begun to come around to his wife’s demand that he give her the money she wants, but she has yet to change her teasing attitude towards him. She does not yet realize that by conceding to her demands for greater financial freedom he is trying to show her his love and appreciation, instead seeing his offer of money as another tactic in their marital power struggle.
Sir Peter continues to tell Lady Teazle they will never fight again, but then adds that she always starts their fights. They begin to argue, and she says that she never should have married him. He says she had never been proposed to by such a rich man, and Lady Teazle says that she refused someone who would have been a better match—because he has recently broken his neck and died. Enraged, Sir Peter says that he now believes the reports about her and Charles. Lady Teazle says she will not listen to these groundless accusations. Sir Peter says they should divorce, and Lady Teazle says that, if divorced, they will be very happy. Then, laughing, she leaves. Sir Peter is enraged, and even more so because Lady Teazle did not lose her temper.
Reacting to Lady Teazle’s continued teasing, Sir Peter cannot resist reasserting his belief that she is always in the wrong. When, in response, she hints that she would be happier if he were dead and she had inherited his money, he jumps to the conclusion that this cruel suggestion is proof of the rumors circulating about her infidelity. She then becomes even more indignant at the false allegation that she is doing something to dishonor their family and continues to make cruel jokes at his expense.