Six years before the beginning of the story, Goriot came to the boardinghouse. A widower of about sixty-two, he was a successful, retired businessman. He immediately produced a favorable impression on wealth-admiring Mme. Vauquer, who addressed him as Mister Goriot and soon conceived secret hopes to become the second Mrs. Goriot.
Practical in nature, she quickly saw what benefits could be derived from having this wealthy man as a boarder. She immediately started to raise the standing of the house and advertised, using Goriot's name and wealth as a means to secure better-class lodgers. Attracted by this publicity was a Countess de l'Ambermesnil, a woman of thirty-six. Delighted, Mme. Vauquer treated such an important guest with special favors. Quickly the two women became friendly, and Mme. Vauquer, still interested in Goriot, asked the countess to act as a go-between. The countess readily accepted, with the idea of keeping such a wealthy man for herself, but she was incensed by Goriot's indifference.
Hurt in her pride, the countess started downgrading Goriot in Mme. Vauquer's mind and, knowing now that she could not find a catch at the pension, departed owing six months' rent.
This event marked the turning point in Mme. Vauquer's attitude toward Goriot; needing a scapegoat and knowing now of Goriot's lack of interest in matrimony, her admiration and inclination for the retired businessman turned into spite and hatred. She first denied her lodger the small favors he had been granted, especially at the dinner table, but Goriot, a frugal and thrifty man, hardly noticed that. All the more enraged, the malicious Mme. Vauquer tried to find other ways to torment him. She enlisted her lodgers to needle him and then tried to find reasons to humiliate him.
Soon Goriot's fortune seemed to be shaking: He asked to move up to the second floor, cutting his rent to 900 francs and doing without a fire in winter. From that day the formerly respected Mr. Goriot was referred to as "Old Goriot." ("Père" in French is a term with a double meaning, impossible to translate into English. First, the derogatory meaning of "père" translated by "old" suggests the physical and moral downfall of the character, and, second, it means "father," introducing the "paternity" theme of the novel.)
Another incident gave Mme. Vauquer a reason to exercise her cruelty. She had found that Goriot was receiving pretty girls in his room. She questioned Goriot, who told her that they were his daughters. Her twisted mind immediately interpreted the relationship as mistresses, but as long as Goriot had been wealthy, she was willing to close her eyes to his affairs. Then when Goriot's fortunes seemed to deteriorate, she violently objected to his "disrespectable" behavior. Goriot was rapidly declining. He moved to the third floor, dressed in cheap clothing, and cut down on all luxuries. He became thinner and thinner, more and more morose, to the point that Bianchon, the young medical student, suspected a state of cretinism. In four years the strong, successful, well-dressed merchant "had become a feeble, vacillating septuagenarian," reacting only at the mention of the young girls he called his daughters.
This section tells us about the rise and fall of our title character, Old Man Goriot. It is highly dramatic to watch the change in him and the petty cruelty of his landlady and the lodgers toward him. It is important to notice, though, that we do not as yet learn much about the psychological makeup of Goriot, but rather about his situation. This again is part of the dramatic progression in the work.
By contrast with Goriot's seeming impassability, which Bianchon, the young medical student, calls "cretinism," the other tenants, especially Mme. Vauquer, are sharply portrayed. Mme. Vauquer is shown to be a woman with a malicious mind, impressed by title, money, and the power they command. She is an egotistical hypocrite who will close her eyes on sin if the sinner is rich, but who will crucify him when he becomes poor in the name of decency.
Goriot here becomes the center of a suspenseful plot. We are wondering what the cause of his downfall might have been, whether he was really a rich merchant or, as Vautrin puts it, a shady character "selling short" in stocks and bonds. We know, of course — Balzac tells us — that the two pretty girls who visited the old man were his daughters, but why were they so elegantly dressed and apparently of a different social environment? Why did they stop coming? And was this Goriot's only motive for depression?
In this section, even more so than in the preceding one, we can see the dual treatment of the subject matter: an objective, realistic narrative showing the decline of Goriot and the resulting attitude of Mme. Vauquer and her other tenants, and the subjective moralizing commentary about the characters. "It is one of the most detestable habits of a Lilliputian mind to credit other people with its own malignant pettiness," says Balzac of Mme. Vauquer.
Another concern of Balzac's expressed in this section is the interrelationship of the people and their milieus. Talking about Mme. Vauquer, Balzac says, "she is at once the embodiment and the interpretation of her lodging house, as surely as her lodging house implies the existence of its mistress."