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Jem invites Walter Cunningham over for lunch when he finds out that the boy doesn't have any food. Walter hesitates but then takes Jem up on the friendly offer. At the Finch house, Atticus and Walter discuss farming, and Scout is overwhelmed by their adult speech. Walter asks for some molasses and proceeds to pour it all over his meat and vegetables. Scout rudely asks him what he's doing and Calpurnia gives her a lecture in the kitchen about how to treat guests - even if they're from a family like the Cunninghams.
Back at school, there's a big scene when Miss Caroline screams upon seeing a louse ("cootie") crawl off of the head of one of the boys in the class. This boy, Burris Ewell, comes from a family so poor that Atticus says they "live like animals." Their children come to school on the first day of the year and then are never seen again. The children inform their teacher of this, explaining that "He's one of the Ewells." Miss Caroline wants Burris to go home and take a bath, but before he leaves the room for the rest of the year, he yells crude insults at her and makes her cry. The children comfort her and she reads them a story.
Scout feels discouraged returning home from school. After dinner she tells Atticus she doesn't want to go back. Atticus asks her to understand the situation from Miss Caroline's point of view - Miss Caroline can't be expected to know what to do with her students when she doesn't know anything about them yet. Scout wants to be like Burris Ewell and not have to go to school at all. As Atticus explains, the town authorities bend the law for the Ewells because they'll never change their ways - for instance, Mr. Ewell can hunt out of season because everyone knows he spends his relief checks on whiskey and his children won't eat if he doesn't hunt. Atticus teaches Scout about compromise: if she goes to school, Atticus will let her keep reading with him at home. Scout agrees and Atticus reads to her and Jem from the papers.