Chapter 3 of Silas Marner introduces us to Squire Cass and to his two sons, Godfrey and Dunstan. We learn that, although Squire Cass is one of the most revered people in Raveloe, he had done what many other men of his social status do, which is to allow his two sons to grow up "idle". As a result, the townsfolk narrator explains, the youngest son, Dunstan, has become a wayward, a drunk, and as he is described he is also
a spiteful, jeering fellow, who seemed to enjoy his drink the more when other people went dry
It is also explained that, although Godfrey as the eldest son is the one who held the better prospects of a productive future, he also has fallen prey to the tricks of his brother, developing a relationship which is mainly dominated by Dunstan.
One of the tricks that Godfrey falls into involves the theft of money from one of Squire Cass's tenants. Godfrey took the tenant's rent money to lend it to Dunstan. Now Dunstan does not want to pay it back, making Godfrey quite upset since he knows that Squire Cass will be upset.
Rather than showing any kind of remorse, Dunstan openly threatens Godfrey to blackmail him by telling their father that Godfrey had married and fathered a child with a low-life woman, a laudanum fiend named Molly. With utmost defiance, Dunstan basically tells Godfrey that he will not pay, and that he refuses to take Godfrey's threats, to which Godfrey replies:
..don't flatter yourself that your secrecy's worth any price you choose to ask. You drain me of money till I have got nothing to pacify her with, and she'll do as she threatens some day. It's all one. I'll tell my father everything myself, and you may go to the devil.
Regardless, in the end Dunstan gets away with it and Godfrey offers another way to make up for the money. This is what leads to the incident with losing the horse that Dunstan was meant to sell, and to the eventual theft of Silas Marner's money.
Godfrey Cass in Chapter Three of this novel is not in a good position. He is being pressed by his father to give him the money that Fowler originally gave Godfrey for his rent. Godfrey however gave that money to Dunstan, his ne'er-do-well brother, because Dunstan is blackmailing him because he knows that Godfrey married secretly somebody who is below him in social position. This is a secret that, if revealed, will surely result in Godfrey being disinherited by his father and losing out on the chance of being accepted by society. Note what Dunstan says to his brother when Godfrey demands the money:
I might get you turned out of house and home, and cut off with a shilling any day. I might tell the Squire how his handsome son was married to that nice young woman, Molly Farren, and was very unhappy because he couldn't live with his drunken wife, and slip into your place as comfortable as could be.
As this quote reveals, because Dunstan knows of his elder brother's secret marriage, he holds massive power over him, and because of this, unfortunately, Godfrey has no defence and is forced to comply with Dunstan's wishes. Godfrey wants the return of the money that he gave to Dunstan that was rightfully his father's, but Dunstan's refusal to give it back means that Godfrey is going to have to find some other way of paying it.