The town's bourgeoisie watch with judging and disapproving eyes as Mads Skern opens his new clothing shop, in direct competition with Arnesen's. Oluf Larsen's daughter, Ingeborg, starts as a clerk in his store, much to Mads' pleasure.

Agnes delivers a boy, while Vicki, widow of Arnesen, returns to Korsbæk as a traveling vaudeville actress and reconciles with her father, the Colonel. Via Oluf Larsen she meets Herbert Schmidt, who now lives with the Larsens. Hans Christian Varnæs learns that his mistress Ms. Jacobsen is pregnant from their affair. She wants an abortion, which he pays for in betrayal of his own morals.