Robert is celebrating his impending election as a Fellow the Royal College of Physicians, thanks to his old friend Sir William Fredericks. Sir William's son, Martin, plans to go to medical school and is being given the opportunity of observing Robert's practice and the Thrift. In the midst of the festivities, Robert's long-estranged sister Emily returns from India twenty years after eloping with a married man, an estate manager. Emily had taken with her not only all of her mother's jewels, but also 5000 pounds in cash--which would have been Robert's inheritance. Needless to say, Robert is less than thrilled to see her. Mr. Coxon, Emily's lover (whose wife had refused to divorce him), has died and, since she has no claim on the pension, she is now penniless. Eleanor tries to effect a reconciliation, believing that her aunt is now a reformed character, but Robert is resistant.
Meanwhile, Marsham's two-year-old daughter Molly is admitted with a broken leg to the Thrift, where a child has recently died of diphtheria. When Molly also contracts diphtheria, he is compelled to perform a tracheotomy on his daughter to allow her to breathe, but the prognosis is very poor. In an emotionally vulnerable state, Dr. Marsham tells Eleanor that he no longer loves his wife Sylvia, who sees him now merely as a meal-ticket, and he believes that only Eleanor truly understands him.
When Emily abruptly disappears from the Bramwell home, there are mixed feelings of joy and relief. But then news comes that Sir William's son Martin has also vanished...