While the architects and other interested parties are abuzz with fair-building activities, the Conners, Holmes's residents, are experiencing turmoil. Gertie, Ned's sister, wants to leave Chicago but won't tell Ned why. Larson subtly implies that Holmes is responsible for Gertie's interest in fleeing. Ned arranges for Gertie to go back to Iowa. Shortly after Gertie returns to Iowa, she falls ill and dies.
After Gertie's death, Ned and Julia continue to grow more distant and hostile toward one another. Ned suspects Holmes and Julia of having an illicit relationship, but his suspicion subsides after Holmes offers to raise his salary in order for Ned to be able to buy the pharmacy. Holmes also tries to get Ned to purchase life insurance for Pearl and Julia, but Ned refuses. In the meantime, creditors come knocking on Ned's door, seeking payment for debts on the pharmacy that Holmes had accumulated. Tensions continue to increase between Julia and Ned. Finally, Ned abandons the store, moves out of the building, and he and Julia separate. He tries to win her back, but they divorce, and he loses custody of Pearl to Julia. After the divorce, Holmes loses interest in Julia.
Chapter 12 helps to advance the Holmes plot. Julia and Gertie appear doomed to death at some point. Holmes seems likely to have more victims, and he's going to have to get rid of the Conners in order to do so. With Gertie and Ned already been disposed of, this chapter sets Holmes up to finish the job of eliminating Julia and Pearl. Holmes's waning interest in Julia and his fascination with his kiln foreshadow the murders of Julia and Pearl.