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On New Year's Eve, Nancy Lammeter makes a conspicuous entry at the Red House, and Godfrey comes forward to help her. Nancy is pained by his attentions, because she had made it clear to Godfrey that she will not marry him. Mrs. Kimble, the Squire's sister, takes Nancy to the Blue Room where she is introduced to the two Miss Gunns, daughters of a wine merchant from a neighboring town. They are quite charmed by Nancy's rustic beauty, but feel that it is a pity that she makes gross mistakes in her grammar and pronunciation. Priscilla, Nancy's sister, enters the room; she is five years older than Nancy and is very different from her. Nancy insists that "sisters must be dressed alike;" therefore, Priscilla is forced to wear a dress akin to Nancy, but one that doesn't compliment her. Priscilla knows that her plain looks don't offer any prospect of matrimony, and she has cheerfully resigned herself to living without a man.
At dinner, Mr. Crackenthrop pays compliments to Nancy's beauty, which provokes well-meaning responses from Squire Cass and Dr. Kimble. Godfrey and Nancy are immensely embarrassed, and Godfrey fears that these quips may bring matters to a head. Solomon Macey, the fiddler, leads the people to the parlor to open the dance. Nancy has to leave in the middle of the dance because she has torn her gown, and it needs to be sewn. As Godfrey waits with Nancy for Priscilla to come, Godfrey pleads with Nancy to forgive him for his erring behavior in the past and asks her for a dance. Nancy, however, treats his overtures with a polite chilliness.
This chapter presents a contrast between the characters of Nancy and Godfrey. A clinging to principles marks Nancy's character; which is her strength as well as her weakness at times. Nancy refuses to accept Godfrey due to his errant ways. She says with self-importance, "Did he suppose that Miss Nancy Lammeter was to be won by any man, Squire or no squire, who led a bad life?" In complete contrast to Nancy's principles and determination, Godfrey lacks self-control. He knows right from wrong and struggles within himself, but he seems to always give in to his desires. In contrast to both of them, Priscilla Lammeter stands out as a very honest, straight forward, and sensible human being. She takes her plain looks with great humor and resigns herself to a life as an old maid. She scorns Nancy's assertion that she (Nancy) will never marry because she knows that it comes from her momentary annoyance with Godfrey.