The real-estate deal involving options on land required by the Street Traction Company for repair shops finally comes through. Babbitt makes a profit of $3,000 and several officials of the company do equally well. About the same time, a customer complains that Stanley Graff has cheated him, and Babbitt fires the salesman. He lectures Graff sternly on ethics and honesty, but Graff refuses to listen politely to Babbitt's pious moralizing. He vents all his accumulated anger at his former employer. Babbitt indignantly threatens to have Graff arrested for cheating, but the salesman warns Babbitt that he will disclose all he knows about Babbitt's part in the recently completed, corrupt Street Traction deal. Graff leaves, and Babbitt decides not to take any further action.
Babbitt makes a business trip to Chicago and takes Ted along. The two of them go to the theater and the best restaurants and have a wonderful time. Their relationship becomes closer, and Babbitt realizes that his son is an adult. He begins to refer proudly to himself and Ted as "the Babbitt men."
After Ted leaves, Babbitt encounters Sir Gerald Doak, an English industrialist who was entertained by the McKelveys and their circle during his recent visit to Zenith. Babbitt read about these events in the newspaper and resented not receiving an invitation to any of the parties or banquets. The two businessmen quickly become friends, for they share many of the same conservative views and enjoy the same sort of amusements. Babbitt is astonished to learn that Doak dislikes "high society" and that he prefers going to cowboy movies.
One evening, by chance, Babbitt encounters Paul Riesling in a Chicago restaurant. Paul is accompanied by a rather frowsy looking middle-aged woman and is annoyed at meeting Babbitt because Zilla and everyone else in Zenith think that he is in Akron on business. He tells Babbitt that he will see him later that night.
Babbitt goes to Paul's hotel room, and the two old friends spend several hours talking. Paul confides that his life with Zilla has become unbearable and that he is intimate with another woman, May Arnold. May is a widow, and Paul claims that she offers him the understanding and affection that he cannot get from his wife. He frequently comes to Chicago to see May. Babbitt starts preaching to Paul about moral obligations, but finally relents and agrees to stick by his friend no matter what happens. In Zenith, Paul rarely touches alcohol, but now he is drinking heavily. Later, when Babbitt is alone, he thinks about Paul and cries.
Back in Zenith, Babbitt goes to see Zilla in order to borrow something for his wife. While there, the topic of Paul comes up casually, as he had planned. Zilla suspects that her husband is seeing another woman, but Babbitt denies this notion. She discusses her marital problems with Babbitt and admits that she is cruel and insensitive to Paul's needs. She promises to be a better wife in the future.
After Paul returns, he tells Babbitt that his wife is being a lot nicer, but that it is too late. Her old ways continue to surface now and then, and he has already learned to detest her. Some day, he says, he will find a way to get rid of her.
Babbitt's real-estate business is a success because Babbitt is clever — and because, if sanctioned by precedent, Babbitt will go to any practical lengths to make a dollar. He does this kind of finagling regularly. He has his own intelligence network that tells him which tracts of land are soon to become valuable so that he can, very quietly, buy them up. He has secret associates and makes secret deals. But he does all this in the name of good business sense.
There is, however, one thing that Babbitt will not tolerate in the name of good business: an employee who makes his own shifty deals. Babbitt, therefore, in the name of righteousness, fires Stanley Graff and, of course, this act is supremely ironic — a fact that Graff recognizes. He, and we, enjoy Babbitt's discomfort when Babbitt must attempt, politely, to discharge Graff. Graff smirks at Babbitt's hypocrisy. He insults Babbitt — and Babbitt's children — and threatens to expose Babbitt. Naturally, Babbitt is terrified. But we suspect that Graff's lecture does no more than frighten Babbitt temporarily because Babbitt knows that ultimately he, Babbitt, is the boss; he has elitist privileges. He and his Booster friends have an automatic, built-in, double set of values: one for themselves and one for their workers.
After Ted returns to Zenith, leaving Babbitt alone in Chicago, Babbitt is empty and deflated until he accidentally meets Sir Gerald Doak. Doak, like McKelvey and Eathorne, is "royalty" to Babbitt; yet Doak proves himself to be even more. Sir Gerald enjoys Babbitt's stories and liquor because he detests all of America's "social rot," especially all of the American hosting that he has had to endure. Babbitt enjoys Sir Gerald because in Sir Gerald's company, Babbitt can secretly indulge himself in "social rot."
Babbitt seems happy, but, as usual, Lewis is busy undermining Babbitt's groundswell of happiness. This time, Babbitt's good spirits are shattered when he sees Paul Riesling having dinner with a dilapidated-looking woman. Why should this upset Babbitt — especially since he knows that Paul has joked about extramarital affairs before? Babbitt is upset because Paul is breaking the rules. It's one thing to be with the boys, implying certain lusty nighttime adventures, but it's another thing to flaunt a flabby, over-rouged woman of forty in public. In other words, in Babbitt's code, the rule is: brag about it, but don't actually do it, and if you must do it, don't ever do it in public.
Babbitt's reaction is surprising. Possibly Lewis overdraws this scene. Even Babbitt knows that he's acting like a fool, but Paul has done something that is in very bad taste, and Babbitt fears that some terrible, ultimate disgrace may happen. Paul is undergoing a crisis, the woman is a symptom of that crisis, and thus we see how Babbitt reacts to his best friend in a time of crisis: he is more concerned about Paul's position in the community than he is about Paul. He is dismayed that Paul would actually have sex with another woman and tell her about his troubles with Zilla — troubles that no one but Babbitt should hear. To Babbitt, a man doesn't confess to just anyone that his wife is driving him crazy. Babbitt is no longer Paul's only confidant.