Peter Keating's firm is going downhill. After the failure of the World Fair exhibition, they are losing money. Toohey is backing Gus Webb instead of Peter, who is now out of fashion. Peter's mother is living with him again and suggests that he marry Katie, but Peter no longer wants to. Secretly, Peter is painting again.
Peter's partner wants to build government buildings. Peter goes to Toohey to try to get the new government housing project, Cortlandt Homes. Toohey says Peter is getting fat. Peter wants to know why Toohey is no longer backing him, and Toohey says that he backs only principles, not people. Toohey gives Peter the specifications for Cortlandt Homes, and Peter knows that he can't build economical enough homes for the project. Though Peter works through the day.....
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