Philip shows Eliza a newspaper article announcing that Aaron Burr has won the Senate seat for New York, beating Eliza’s father. Eliza accepts the news, but Hamilton takes this victory as a personal attack and confronts Burr about it, pointing out that Burr switched political parties in order to run against his father-in-law.
France is beginning a war with England and America needs to decide if they will join and help France fight. Jefferson and Hamilton engage in another "Cabinet Battle." Jefferson, loyal to France after the time he spent there as an ambassador, wants to uphold their treaty from the revolution, as France gave them money, guns, and troops. He personally insults Hamilton in order to rile him up. Hamilton argues with Jefferson that they are not required to uphold their agreement with France, as they signed it with the king, who has since been executed by his people. Washington agrees with Hamilton, as he is worried they aren’t strong enough to start another war with England. He also notes that the French are disorganized and have no hope of winning.
Jefferson, Madison, and Burr begin working together plotting to bring down Hamilton. They resent the fact that Washington’s support of Hamilton gives him so much power, and want to sabotage his success. They sing a song called "Washington on Your Side."
Washington informs Hamilton that Jefferson has stepped down from his seat in the Senate in order to run for President. Hamilton is sure that Jefferson doesn't have a chance against Washington, but Washington wants to retire, in order to inspire a fair democracy. He wants Hamilton to help him write an address to the people to say goodbye. While Hamilton is against it at first, Washington eventually convinces Hamilton to help him. Washington and Hamilton sing the address together. By the end of the song, Washington has taken over, saying goodbye not only to the American people but to the musical's audience as well.
In the new election, Jefferson loses to John Adams. King George appears again, mocking America for losing Washington and replacing him with Adams. Adams, he says, doesn’t have the impressive presence that Washington has, and King George is sure that the people are going to “eat him alive."
With Washington gone, Hamilton’s career begins to go downhill. John Adams doesn’t like Hamilton and fires him from his cabinet, insulting him behind his back. Hamilton responds by writing a pamphlet designed to destroy Adams' reputation.
Jefferson, Madison, and Burr continue to plot how to take Hamilton down. Jefferson says that "as long as he can hold a pen, he's a threat." The trio approaches Hamilton, sure that they have found evidence that says he is engaging in illegal speculation in order to gain money from his position. Hamilton knows they cannot prove it, but worries that people will believe them anyway, so he agrees to tell them that he had an affair with Maria, if they agree to end the rumors about speculation. Although Madison and Jefferson agree to stay quiet, Burr lays down a clear threat to Hamilton.
Worried about Burr’s threat, Hamilton decides that for the good of his reputation, he needs to tell people about the affair himself and not allow others to twist the story. In "Hurricane," Hamilton sings about his childhood, from the day of his mother’s death to the hurricane that destroyed his town. In his story, we learn that he wrote a poem about the wreckage, and people were so inspired by it that they gathered funds in order to send Hamilton to America to get an education. Continuing the thread of using writing to advance himself, Hamilton writes the Reynolds pamphlet in order to control the narrative of his life.
Hamilton’s enemies are ecstatic about the Reynolds pamphlet, as they believe it will destroy his chances of running for president. Angelica enters, furious with Hamilton for betraying her sister, having traveled home from London to support Eliza in her difficulty.
Eliza burns the letters she and Hamilton wrote each other. She knows that historians might use them to prove that they loved each other and she doesn’t want them to be used to redeem his reputation. She sings that the “world has no right to her heart," removing herself from the historical narrative.
Tensions have been building between Hamilton and his peers, but it is in this section that that tension begins to compound into an actual threat. The resentment felt by Jefferson, Madison, and Burr is directly proportional to Hamilton's growing influence. As he becomes more powerful, a more consistently trusted and acknowledged protege of Washington, the other Founding Fathers see him as more of a threat, and begin to plot his demise. While Hamilton's hard work, competence, and position have caused trouble in the past, it is not until now that those rivalries begin to become vengeful.
The musical is meta-theatrical in that it acknowledges the presence of an audience at various points and the audience is asked to stand in for various groups of people in the narrative. For instance, when Washington resigns from the presidency, he sings his address as a goodbye to the American people. At some point during the song, he begins singing directly to the audience, and the audience becomes a proxy for the American citizens during Washington's presidency. The stage itself comes to represent the government, and the authority wielded by the performer playing Washington represents the authority of the character, Washington. This simple trick blends the play world and the stage world in ways that further involve the audience in the action.
Hamilton is not only gifted with a pronounced confidence and strong work ethic; he also has a way with words. He is a gifted writer, and is valued by Washington and others for his ability to write so prolifically and well. When Burr, Jefferson, and Madison meet to discuss how to ruin Hamilton's career, Jefferson says, "as long as he can hold a pen, he's a threat." This shows that Hamilton's greatest power is his rhetorical abilities, particularly his writing. Lin-Manuel Miranda, the creator of the show and its original Hamilton, is praised by many for his nimbleness with language, his ability to spin enthralling rhymes and engaging stories. Thus, Lin-Manuel and the character he has written and originally performed become merged, in that they share a knack for the written word. This biographical resonance between creator, actor, and character lends a playful and layered quality to the musical. The strengths and struggles of Alexander Hamilton are the strengths and struggles faced by writers like Miranda.
Until now, Hamilton has been a lively and rambunctious character, and his music has reflected this scrappiness and fortitude. As his fortune begins to take a turn for the worse, and his reputation hangs in the balance, he sings "Hurricane," an emotionally wrenching song that tells about his past as a hurricane survivor and an orphan. For the first time, we see Hamilton's more vulnerable side, as he sings honestly about the various hardships he has endured. He is facing a reckoning moment in his life, coming to terms with the consequences of his missteps and is beginning to evaluate his own sense of integrity, in light of all the trials he's been through.
When Hamilton's crimes are revealed, his wife Eliza sings a heartfelt ballad about her feeling of betrayal, burning the love letters from their early courtship. The song is heartbreaking not just because it is a song about a wife learning about her husband's infidelities, but because it outlines her desire to be erased from the history books, to destroy the records of her love. The betrayal she endures is not only personal and private, but historical, and she must consider how Hamilton's actions affect her not only as a human being, but as a figure in American history. As she burns his letters she sings, "I’m erasing myself from the narrative/Let future historians wonder how Eliza/Reacted when you broke her heart/You have torn it all apart/I am watching it burn." Eliza chooses to respond by erasing her experience rather than amplifying it, and the sentiment is a heartbreaking one.