The characters gather at City Hall. The members of the Trust assure themselves that Sheet will arrive soon and that Dogsborough will help to ensure that he is not convicted. They wait for the mysterious man who will supposedly clarify everything on Dogsborough’s behalf; he will arrive with Sheet. 

Gaffes brings news that Sheet has been found murdered in his hotel room. Clarke believes that the murder has “torpedoed this investigation” (31), yet O’Casey continues to ask questions. The members of the Trust warn O’Casey to stop his slanderous accusations, but they are interrupted by the arrival of Dogsborough’s mysterious defender: Arturo Ui, flanked by Roma and his bodyguards. His arrival shocks the councilors and the reporters.

O’Casey calls for order. Dogsborough remains silent, leading O’Casey to presume that Ui has his “full confidence” (32). Ui is angry and contentious. He insists that the money was indeed embezzled, but that Sheet was the guilty person, rather than Dogsborough or the Trust. Ui gives alibis for himself and Roma, then asserts that “Sheet’s suicide is but the inevitable result / of his monstrous crime” (34). O’Casey insists that Sheet was murdered and he still wants to know who really owns the dockyard. He accuses Dogsborough of working with the Trust. 

Amid the uproar, Ui demands silence. He defends Dogsborough against O’Casey’s accusations, so O’Casey summons his first witness: Bowl. The trial is interrupted by machine gun fire from outside. Bowl is shot dead outside the court. Amid the confusion, Ui approaches Dogsborough with a congratulatory handshake. He claims that he can always “clear up these situations” (36).

Bodyguards drag a down-at-heel actor into Ui’s suite at the Mammoth Hotel. Ui wants the actor to teach him better pronunciation and presentation, since he plans to “go into politics” (37). The drunk actor—named Mahoney—agrees to help Ui. First, Ui wants to walk with authority. Next Mahoney advises Ui how to stand. Ui wants to impress “the little guy” (38), puffing himself up just like Clarke does. He does not care whether professors or intellectuals feel that his demeanor is affected, so long as he convinces regular people. 

Dogsborough may appear worse for wear these days, Ui says, but he still has a use. Givola suggests that they replace Dogsborough with Giri in the future, but subtly mentions that Giri laughs at Ui behind his back. Ui insists that he is willing to “overlook the foibles of [his] employees” (40). Mahoney encourages Ui to recite a soliloquy from William Shakespeare’s Julius Caesar.

In the Cauliflower Trust office, Ui gathers his lieutenants together in front of a group of small-vegetable dealers. On the platform beside him is Old Dogsborough, seemingly sick. Clark lurks in the background. 

Ui yells about murder, extortion, and gunfire in the streets in the wake of Bowl’s murder on the steps of City Hall. The City Council, Ui says, does nothing. They “would rather spend their time cooking up shady deals and slandering innocent people” (41) than take action. Ui announces that “chaos rules” (42) and claims that, in this violent world, no man would ever willingly lay down the weapon he uses to protect himself, his family, and his property. The current system is broken, and he must strike first lest his enemies strike. He preaches the need for unity, sacrifice, and protection, the latter of which is not free. He offers protection to the vegetable dealers, in exchange for a fee.

Clark is dragged forward to vouch for the propriety of Ui’s offer. Clark recognizes the way in which “certain outside elements” (43) have made the vegetable trade much more expensive and much less profitable. Ui and his men, Clark says, offer a solution. Clark sympathizes with the individual working man, but does not want the workers to band together to strike. A striking worker is a “subversive personage” (44) and must be dealt with accordingly.

Ui credits the presence of Dogsborough to show that his entire operation is above board and respectable. Giri invites questions from the audience, but the people are too intimidated to say anything to him. When Givola asks whether the dealers would rather pay protection or suffer from “murder, tyranny, theft and extortion” (45), the dealers point out that they have not experienced much trouble. 

Hastily, at Ui’s instruction, Givola drags in a heavily made-up Dockdaisy, who leads a little girl by the hand. Dockdaisy is introduced as Mrs. Bowl. Dockdaisy thanks Ui for all his help after her supposed husband’s death. Giri is wearing Bowl’s hat; he has a habit of wearing the hats of his victims in public. He walks through the crowd, leading a group of men who carry heavy gasoline cannisters out the door as Ui deplores the “shameless wave of crime” (46). 

As a bodyguard sings a schmaltzy song in memory of Bowl, fire engines rush in the street outside. On the waterfront, Mr. Hook’s vegetable store is on fire. Cans of gasoline were found nearby, indicating arson. Roma is incensed when someone accuses Ui’s men of setting the fire. The bodyguards intimidate the dealers into denying that they saw anything. Ui points to the fire as proof that he was right and that the dealers should support him.