Martha discovers Rosalie Wells listening at the door and accidentally closes it on her arm, slightly injuring her. When Mary finds a missing bracelet that belongs to another student among Rosalie's things, she forces her into revealing what she overheard outside Martha's room. Mary, who harbors a pathological hatred for her teachers, then tells her grandmother a grossly distorted version of the argument between Martha and Lily, suggesting Martha and Joe engaged in an illicit sexual affair, and she coerces Rosalie into verifying the story by threatening to reveal her theft of the bracelet. Mrs. Tilford is shocked by the revelation and has all the parents withdraw their daughters from the school, leaving Martha and Karen mystified.