Halloway confesses his fear of Mr. Dark and the Carnival, yet he believes that, somehow, Mr. Dark fears him, too. He speculates that even as far back as primitive times, people realized that life is short and that eternity is long. From this realization, the qualities of goodness and of love developed. Yet Halloway knows that goodness is not always the dominant force within us. Furthermore, he suspects that the Carnival, knowing this too, waits and watches for a time when people are particularly vulnerable to sin. Then it captures them when they least expect it. For this reason, Mr. Halloway talks to the boys about evil. "We can't be good unless we know what bad is," he says.
Halloway then gives the boys a lecture on the origin and nature of evil. He explains that evil first began millions of years ago when one man fed himself on other men's unhappiness and pain. The number of evil men grew as the world grew because there was always more pain to thrive on. Then wagons and trains took these evil men across the land. Mr. Halloway believes that the evil which they now confront has come their way in the form of the Carnival freaks, who live off the meanness men harbor, the guilt men hide, the secret joys men experience over another's pain, and the dissatisfaction which men feel with themselves.
Their problem now is to put this Carnival to rout. Before they have time to formulate a workable solution, however, the boys realize that an intruder is in the library. Once again, they hide.