Oliver remains in Fagin's room for many days, picking the marks out of handkerchiefs and sometimes entering into the curious game of extracting objects from the old man’s pockets. When the other boys return empty-handed, they may be denied supper or rewarded with blows. The naive Oliver interprets these actions of Fagin as motivated by a worthy respect for diligence.
Oliver chafes under restriction and is granted permission to go out with the Dodger and Bates. At first he is puzzled by their erratic behavior, but at the sight of a gentleman absorbed in reading in front of a book stall, they swiftly go into concerted action. The Dodger steals the man’s handkerchief, hands it to Bates, and the pair run off. In a flash of revelation, Oliver understands all he has witnessed since arriving in London. Frightened and bewildered, he too begins running.
Just as he misses his handkerchief, the gentleman at the bookstall sees Oliver fleeing and concludes that the boy is the thief. The old gentleman shouts, “Stop thief!” The Dodger and Bates unscrupulously repeat the alarm and run after Oliver. The hue and cry spreads rapidly, and a crowd chases the hapless object of it.
As his strength fails, Oliver is brought down by a blow from one of the pursuing mob. He is taken into custody by a policeman and hustled off, accompanied by his supposed victim, who seems kindly disposed toward the prisoner. The Dodger and Bates have disappeared.
Oliver is hurried to a nearby police office and locked up in a filthy cell. The old gentleman, still carrying the book that he picked up in the stall, wonders about Oliver’s guilt. There is something about the boy that affects him. “Where have I seen something like that look before?” he muses. For a considerable while, the old gentleman endeavors to recall a connection by concentrating on the faces of many people that he has known through the years. But in vain; no countenance out of the past bears a resemblance to Oliver’s.
The reflective old man is summoned to the courtroom, where Oliver is already installed, trembling with fright. The proceedings are conducted by an infamous magistrate, Mr. Fang. He is in an uncommonly vile mood because he is at the moment reading one of a long series of newspaper reports urging that he be subjected to investigation on account of his decisions.
Fang attempts to terrorize Mr. Brownlow, the prosecutor (plaintiff). Brownlow, however, will not be intimidated and finally is able to relate his side of the case.
Oliver is so overcome that he cannot even utter his own name. A compassionate officer supplies the name Tom White and contrives replies for other questions put to Oliver. The boy is obviously ill, but the sadistic judge forbids anyone to support him. So as the youngster falls insensible, Fang pronounces a sentence of three months at hard labor.
At that instant, the owner of the book stall forces his way into the courtroom, rekindling Fang’s venomous temper. The man, nevertheless, is able to deliver his testimony. The bookman had watched everything that happened, and his information clears Oliver.
Oliver is discharged, but he is quite unable to move on his own power. Mr. Brownlow immediately secures a coach and drives off with the stricken boy.
