Billy visits London, and Ethel is overcome with relief that he is still alive. Bernie (the secretary of the Labour Union and a close friend of Ethel) and Ethel talk about Britain’s financial commitments to the war. Bernie points out that Britain is spending five million pounds daily, which is 10 times the usual cost of running the country. He explains that victory for Britain would mean Germany would be obliged to pay war reparations. Bernie declares his love for Ethel. Ethel does not love him back but considers the arrangement for Lloyd’s sake.

Much to Gus’s relief, Woodrow Wilson is re-elected. The American public was outraged by Britain’s cruelty to the Irish during the Easter Uprising, and public opinion remains firmly anti-war. Gus is still devastated by Olga’s rejection of him. Meanwhile, Lev is given one of Vyalov’s nightclubs to manage. Wilson asks Gus to go to Berlin to ascertain the likelihood of a peace deal being brokered between Britain and Germany. The kaiser writes to Wilson, and it seems Germany is considering peace, but Britain and France are reluctant.

Walter reflects that little progress has been made by the Germans or the Allies in two years. He is exhausted with the war.