The next morning Elsie Lilly finds out that Dick got her red roses all the way from New York. Victoria Lake and her girls sing (“The Fashion Show”). Dick meets Percy and Georgina and informs them that the "newlyweds" Eddie and Elsie Darling are at the Inn. He tells them how they had cocktails on the boat; Percy and Georgina are shocked and angry. The clerk informs Madame Matroppo that he has to sing in a minute, and he needs a last minute voice lesson. She decides to hypnotize him, and he tells her he used to be a cashier in a police station. He fantasizes about money and having someone to share it with (“I’d Like to Have a Million in the Bank”).