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The heart of a short story lies in its central conflict. The central conflict in "Babylon Revisited" exists between Charlie Wales, Fitzgerald's protagonist, and Marion Peters, his former sister-in-law. The nature of their conflict is both domestic and economic, much of it rooted in the story's antecedent action.
In previous years, Marion, her husband Lincoln, Charlie, and his wife Helen [Marion's sister] had all lived in Paris, Americans far from home. Charlie and Helen had been drawn into the decadence of Parisian life, while Marion and Lincoln had maintained a conventional lifestyle in keeping with American values and tradition. Theirs had been a stable marriage, while Charlie and Helen's marriage had been turbulent, fueled by Charlie's alcoholism and Helen's infidelity. Marion felt great contempt for Charlie's behavior in Paris during those days and her feelings remain unchanged throughout the story. Furthermore, she continues to blame Charlie for her sister's tragic death. The contrast between Charlie's former wild Parisian lifestyle and the stable serenity of the Peters' home plays an essential role in the story's developing plot.
When Marion has decided to return custody of Honoria to her father, two of Charlie's friends from his old days in Paris appear at the Peters' apartment. Their drunken state reminds Marion of the life Charlie had once lived, and their physical presence in her peaceful home emphasizes the contrast between that lifestyle and the Peters' stable, conventional way of life. Convinced that Charlie has not reformed, she changes her mind; she will keep Honoria.
The conflict between Charlie and Marion is also rooted in the economic differences between them. As a wealthy American in Paris, Charlie had been profligate, reckless and wasteful with money. As he and Helen had enjoyed the comforts of wealth, Marion and Lincoln had lived within very limited means. Marion's resentment has remained very much a part of her relationship with Charlie:
When you were throwing away money we were living along watching every ten francs.
To further exacerbate this conflict, when Charlie returns to Paris to reclaim his daughter, he has regained his lost wealth. Once again he is a rich man, and Marion's continuing bitterness is evident:
I suppose you can give [Honoria] more luxuries than we can . . . I suppose you'll start [throwing away money] again.
Charlie's response is significant as he makes an attempt to defend himself:
Oh, no . . . I've learned. I worked hard for ten years, you know--until I got lucky in the market, like so many people. Terribly lucky.
Charlie reminds Marion that at one time he had worked hard, thus aligning himself with the American values she and Lincoln have lived by; there is some decency in his character, Charlie suggests. His great wealth, he reminds her, came from simply being lucky. The unspoken message is that Charlie did not become wealthy because he is superior to Marion and Lincoln. In effect, Charlie is asking Marion not to blame him because he had money and she did not.
The sharp contrast between Charlie and Marion in terms of domestic and economic elements lies at the heart of the conflict between them and leads to the story's resolution. Charlie will leave Paris, once again, without his daughter.
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