Mr. Merdle’s influence continues to grow throughout the business and social world of England. People view dinner at the Merdle home as a step into his lofty plain. At one such dinner, Lord Decimus Barnacle mentions the change in fortune of William Dorrit. Mr. Tite Barnacle relates what a difficult time the Circumlocution Office had when Mr. Dorrit wanted to pay his debt. There was paperwork that required several months before the office could accept the money. It is discovered that Mr. Merdle’s stepson, Edmund Sparkler, was friends with the Dorrits, especially one of the daughters. Not long after this dinner party, the news is spread that Edmund has been made one of the Lords of the Circumlocution Office. People become even more interested in investing their money in Mr. Merdle’s enterprises. Even in the Bleeding Heart Yard, the name of Merdle becomes known. People plead with Pancks when he comes for the rent that Mr. Merdle would be more kindhearted. Mrs. Plornish has opened a small store in the Yard, assisted by her father, Nandy, and Maggy. She is doing well except for the fact that so many people are buying on credit, which lessens her own income.

Pancks discusses the popularity of Mr. Merdle with Arthur, stating that he is investing one thousand pounds of his own money with Merdle, in expectation of a handsome profit. Arthur is interested in what Pancks has to say, contemplating investment of his own. Mr. Cavalletto, now known as Mr. Baptist in the Yard, has progressed in English and tells of his fears on seeing someone he once knew, though he will not say more. Arthur confesses to Pancks his own fear in seeing this man, Blandois, at his mother’s home.

Edmund Sparkler’s new career at the Circumlocution Office is the talk of Rome. Some think that the position does not take much brains and so would fit Edmund immeasurably, and most agree that it will be an easy job with a large income. Fanny is upset at the lack of suitable men in Rome, but Amy tries to convince her that there will come someone in time. Fanny talks of Edmund and the advisability of marrying him. Amy is concerned about this, knowing that Fanny does not love Edmund. Fanny, however, views it as a way to get back at Mrs. Merdle and her snobbish ways. Not long after, Edmund and Fanny come to Amy and announce their engagement. That night, Fanny cries on Amy’s shoulder.