It is now the evening of April 17, 1906. Burley has called in some favors and had the San Francisco Police Department raid the "Paradise", destroying its gambling equipment and running off the patrons. Blackie, distraught about the future of his club, ends up at the city's annual Chickens Ball. Mary and Burley are in attendance. After performances by acts from the other Barbary Coast clubs, the MC requests the "Paradise's" entry. When no one steps on stage, Mary, just having learned of the club's closing, enters the Chickens Ball competition for the "Paradise". She rouses the audience to join in a chorus of "San Francisco", and wins. However, Blackie angrily refuses the prize money, tossing the prize cup and gold coins to the stage floor. He angrily states that Mary had no right to sing on behalf of his club. Embarrassed, Mary is about to leave the ball with Burley.