Bishop Morehouse is committed to a psychiatric hospital. Once released, he no longer preaches against the rich, and Avis concludes that he has succumbed to the ruling class’s pressures. The Bishop sells all his belongings and disappears. Avis later encounters him in the streets wearing tattered clothes and carrying a bag of groceries. She follows him to a tenement where he aids an old woman who mends clothes for a meager wage. The woman describes her struggle to survive and the death of her daughter by the machines. Avis learns about the destitution in her neighborhood and recalls Ernest’s claim that systemic change and not charity will alleviate societal problems. 

The Bishop returns with Avis to her home and recounts his new life. He had secretly sold his belongings and deposited his money in untraceable accounts. He thanks Ernest for enlightening him to the ways that capitalism robs the laborer and now spends his days clandestinely feeding the hungry with his savings. He realizes the true value of money and feels genuinely happy that he is doing God’s work. A week later, the Bishop is discovered by the authorities and re-committed. Ernest concludes that society has deemed the redistribution of wealth a mental disorder.

In the fall of 1912, Ernest is elected to Congress, and Avis credits the fall of William Randolf Hearst and the Democratic Party for creating an opening for the Socialist Party. The socialists hope to gain the support of farmers, but the Grange Party divides the strength of their numbers. The Socialist Party believes that the country is ripe for change, but Ernest does not underestimate the Plutocracy’s power. Avis criticizes the farm trusts that transform farmers into serfs and the vagrancy laws that punish the starving. The Plutocracy continues to slander the socialists as aberrations and divides the proletariat from potential alliances with the middle class, the Church, and farmers. Avis laments that the elected officials of the Socialist Party will be ineffective without power and that officials from the Grange Party will be denied their elected positions in the spring when the incumbents refuse to retire. She criticizes the Oligarchy’s opportunism in supporting war with Germany to build the military and dominate the world economy. The Everhards hold a secret meeting in their home with Western socialists and organize an international general strike. The war is called off, and the German emperor is dethroned by socialist leadership and becomes a socialist state. The US Oligarchy maintains their power and convinces the American public that they have eliminated an economic rival. 

Meredith’s footnotes describe William Randolf Hearst’s newspaper empire, the exorbitant price of advertising during Ernest’s time, and the history of the Roman yeoman and their demise. The footnotes also discuss the international socialist organization’s anti-war stance and belief that war is fought by the working class to benefit the capitalists.

By early January 1913, violent revolutions have broken out in countries around the world. Governments respond to American imperialism by reforming into socialist commonwealths. The new socialist states question why the US is lagging. The Everhards convene a meeting in their home with labor unions to organize another general strike. An alliance with the Grangers fuels their optimism for change, but the president of the Machinists’ Association declares that they are beaten and that Ernest has to look out for the interests of his own men. Ernest surmises that he has struck a deal with the Oligarchy and concludes that the Iron Heel has won. He anticipates the defection of the most powerful unions and the creation of labor castes that favor those that support corporate industries. Ernest predicts that the growing surplus wealth will be funneled into building extravagant “wonder cities” (226), achievements in science, and the transformation of oligarchs into “art-lovers” (226), all the while perpetuating the subjugation of the working class. He envisions future clashes where the oligarchs and working class will have turns at ruling, but it will take centuries if not millennia for the common people to permanently rise. Avis disagrees with Ernest, and as she writes on the eve of the Second Revolt, she believes that the Revolution will succeed in overthrowing the Oligarchy.

Meredith’s footnotes provide historical examples of when the courts blocked labor reforms in 1905 in Pennsylvania and New York. Another footnote mentions James Farley, a real strike breaker during London’s time, and his fictional assassination at the hands of a wife whose husband was murdered by one of Farley’s men. The footnotes also describe the marvelous cities of Ardis and Asgard that were built by the oligarchs and continue to stand centuries later. Meredith writes from Ardis.

By late January 1913, the Oligarchy rewards the favored unions for breaking with international organizations and grants them better conditions and higher wages that unorganized labor must pay for. Avis calls this new system “grab-sharing” (229). Members of the favored unions are regarded as traitors and are subject to threats and violence from the general working class. They relocate to protected neighborhoods with better schools and sanitation while conditions for the general working class degrade. On the world stage, parts of Western Europe form socialist commonwealths while England struggles to hold onto its colonies. The US Iron Heel supports countries that suppress socialists, and Japan dominates Asia as an imperial power by suppressing its own proletariat revolutions. The US contends with violence and civil unrest as religious revivals surge and armed forces are deployed. Opponents of the Oligarchy are imprisoned, institutionalized, or executed. The socialists believe that the millions of discontents will rise and that their elected officials will change Congress and the government. Ernest responds by asking them how many rifles they have. 

Meredith’s footnote discusses the real figure of P. M. Arthur, president of the Brotherhood of Locomotive Engineers union, who later cooperated with companies and withdrew from a railroad strike.