Using insider information, Babbitt extorts a high price from the Street Traction Company for land that it needs to rebuild some car-repair shops. Despite protests from the purchasing agent, the vice president, and the president of the company, a compromise is reached. Babbitt makes three thousand dollars from the deal.
When a significant complaint is made against Stanley Graff for breaking a lease, Babbitt fires him. In the process, Graff accuses Babbitt of being "crooked in the first place" (p. 216) and of forcing Graff into being dishonest by not paying him enough. Feeling uneasy about these claims, Babbitt decides to take Ted with him on a trip to Chicago. The two men talk, laugh, and see a musical comedy together, and Babbitt is very lonely after Ted returns to Zenith.
Dining by himself at the Regency Hotel, he runs into Sir Gerald Doak, and they go to see a movie and then have a drink back at Doak's hotel room. They had both previously been so lonely, discouraged, and bored that they are now extremely glad for each other's company, and Babbitt fantasizes about telling Mrs. McKelvey and others at the Athletic Club about how chummy he and "Jerry" are. But his spirits are dampened when he sees Paul Riesling with a woman back at the Regency Hotel. Paul coolly and begrudgingly introduces Babbitt to May Arnold, and Babbitt determines to meet Paul later at his hotel to discuss the situation.
At Paul's hotel, Babbitt tells the clerk that he is Paul's brother-in-law in order to be allowed to wait in Paul's room until his return. After three hours, Paul arrives, upset with Babbitt for "butting into [his] affairs" (p. 228). When Babbitt chastises him for being an immoral husband, Paul breaks down and explains that he "can't go Zilla's hammering any longer" (p. 229) and that he is too tired of her torture to be moral. With May Arnold, things are pleasant and simple. Babbitt apologizes and agrees to help Paul by telling Zilla that they ran into each other in Akron, where Paul is supposed to be.
After sending her a postcard from Akron on the way home, Babbitt drops in on Zilla back in Zenith to casually remark that he ran into Paul in Akron. Zilla confides that she is extremely worried that Paul is having an affair, and Babbitt denies it, convincing her that she should be nicer to Paul or she will eventually drive him into the arms of another woman after all. When Paul returns, Zilla is much kinder, but Paul tells Babbitt that "it's too late now"; he is determined to "break away from her" (p. 232) someday.
At the second March lunch of the Zenith Boosters' Club, after much mingling and Chum Frink's address about why Zenith must have a Symphony Orchestra in order to compete with New York and Boston, Babbitt is elected Vice President in the presence of Mayor Lucas Prout. Having never known a "higher moment" (p. 237), he returns to work where, over the phone, Myra informs him that Paul is in jail for shooting Zilla.
Shocked, George drives to see Paul at the City Prison. He waits half an hour until 3:30, which is the designated visiting time, only to learn that Paul refuses to see him. George convinces Mayor Prout to issue an order to the warden to permit George to see Paul.
Paul shows pained remorse for what he has done, recognizing that Zilla "hasn't had too easy a time" (p. 240) either, and explaining that he pulled a revolver on her when she started to nag at him. He did not mean to do it, and he hopes that she will not die. When Paul's lawyer, P. J. Maxwell, arrives, George steps out of the cell and does not return, because Maxwell has ordered the doctor to give Paul morphine.
George drives to the City Hospital and learns that Zilla will not likely die. At home, he forbids his family from discussing the matter. After dinner, he visits Maxwell and offers to commit perjury in the courtroom--lying to claim Paul's innocence. Maxwell assures George that the most helpful thing he can do is keep "strictly out of it" (p. 242).
The trial lasts only fifteen minutes, during which Paul is partially pardoned on account of temporary insanity and is sentenced to three years in the State Penitentiary. Back at the office, Babbitt does not want to face "a world which, without Paul, [is] meaningless" (p. 243).
In a passing, casual way, Lewis's allusion to the unethical deal that Babbitt makes with the Zenith Street Traction Company emphasizes the moral depravity indicated by the previous chapters on inadequate religion. Eathorne makes an off-the-books loan to Babbitt to complete the "triple-crossing" (p. 214) deal. In the past, Babbitt has been professionally dishonest, but he has always been able to convince himself that his actions were just. In this case, Babbitt acts in a way that he knows to be dishonest. He has fallen so far from his image of the Solid Citizen (who at least tries to appear moral to himself even if he is not) that he no longer upholds his former values and standards. Lewis's explanation that "In the midst of closing this splendid deal ... Babbitt was overwhelmed to find that he had a dishonest person working for him" (p. 214) drives the nail into the coffin of this moral condemnation in that it reveals Babbitt's shameless hypocrisy.
The focus of this section now shifts back to the relationship between Babbitt and Paul, who has an affair and is convicted of killing his wife on the grounds of temporary insanity. When Babbitt sees Paul at the table with May Arnold, his reaction is strongly negative. He has "so strong an impulse to go to Paul that he [can] feel his body uncoiling, his shoulders moving, but he [feels] desperately that he must be diplomatic" (p. 225). He finds May Arnold "doubtful" and " withered" (p. 225) and a "dried-up hag" (p. 226). These feelings betray his jealousy. George is so persistent that he waits in Paul's hotel room for three hours in the middle of the night, reminding himself that he must be careful not to say "foolish dramatic things to Paul" (p. 228). After a brief argument about morality upon Paul's return, Babbitt stands beside Paul, "patting his shoulder, making soft apologetic noises" (p. 229). Later, in the cab on the way home, "Babbitt incredulously [finds] tears crowding into his eyes" (p. 230). Reviewed together, all of these reactions indicate a possessiveness, intimacy, and depth of emotion that exceed the boundaries of a typical male friendship. Babbitt is more shaken by Paul's affair with May than he has been about anything else thus far. He does not even understand his emotions, since he realizes that the situation does not call for such anxiety and distress. The suggestion of a homoerotic attraction seems stronger now.
This suggestion is strengthened by Babbitt's reaction to the news that Paul has been thrown in jail. In an act of selflessness of which he seems almost incapable, he offers to commit perjury in order to save his friend. He will not tolerate it if his friends or family discuss the event. When Paul is finally thrown in prison, Babbitt must confront "a world which, without Paul, [is] meaningless" (p. 243). It becomes clear now how much of Babbitt's life has really centered around Paul in a way that seems to surpass Babbitt's relationship even with his wife. Although extremely close male friendships do not have to be homoerotic, this one, on Babbitt's part, might be.