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On his way to bed, the Palmer is asked to accompany Cedric's servants to the kitchen for more drink and gossip. A message is sent to him by Lady Rowena, demanding his presence. She wants more news of Ivanhoe since she heard the Palmer mention Ivanhoe's courageous exploits. All that the Palmer tells her is that Ivanhoe, having fought bravely, is on his way home.
Before going to bed, the Palmer warns Isaac that he has overheard Bois-Guilbert ordering his Moslem slaves to follow Isaac and rob him. Isaac is grateful to the Palmer, and before he escapes, rewards the Palmer with a favor. He sends a letter to his Jewish kinsman asking him to give the Palmer a horse and armor so that he can participate in the Ashby tournament.
Scott gives the reader a detailed account of the persecution of the Jews. Normans, Saxons, Danes, and Britons hated the Jews and instituted cruel laws and high taxes against them. The Britons needed money to maintain a high standard of living, but hated and resented the Jewish businessmen who could lend them money. Despite the persecution they felt, the Jews prospered and accumulated great sums of money.
Despite the kindness that he shows, Ivanhoe, still disguised as the Palmer, is reluctant to travel with Isaac beyond a certain point; but he does him a great favor by warning him of the planned attack on him by the Normans. Isaac is grateful and arranges for the Palmer to have a horse and armor so that he can participate in the upcoming tournament. Isaac is also shrewd enough to realize that the Palmer is not who he pretends to be.
In this chapter, Scott begins to hint at the true identity of the Palmer. His talk with Rowena, his apparent influence over Gurth, and his intelligence clearly indicate he is an important person and suggest that he is really Ivanhoe.