[Giraldi and Valerie have just returned from Rome and put up at the Hotel Royal in Berlin. Valerie writes her brother, the General, a note, which Else answers. Valerie thinks the friendly answer a trap. Giraldi has another interview with Privy Councilor Schieler, "the wonderworker," about the Warnow estates and about enlisting the interests of Count Golm. The Count snaps eagerly at the bait held out by the company--namely, the sale of the Warnow estates through him to the company. Giraldi plans to have Golm get Else's part of the estate by marrying her. Giraldi discovers that Antonio is the original of the "Shepherd Boy" in the exhibition, and identifies him as the son of himself and Valerie. Justus had discovered Antonio in Italy and brought him home with him to Berlin. Antonio remains with Justus to be near Ferdinande. Jealousy leads Antonio to the discovery of the relation between Ferdinande and Ottomar. Ottomar's betrothal to Carla and Else's relations with Reinhold are touched upon. Giraldi goes out to receive His Excellency, tossing a few sweet phrases to Valerie, enough to show her that she is still in his grip, and that she will never be able to break his spell over her. Else calls and finds her in this frame of mind. * * * * * Aunt Sidonie calls to see Valerie and chatters long about the family and the betrothal of Ottomar and Carla. Else has thus been able to reestablish friendly relations between Valerie and her father's family.] * * * * * Giraldi had not intended to stay away so long. It was to have been only a formal call, a return of the one he had made on His Excellency yesterday morning--but that loquacious gentleman still had much to say about the things they thought they had settled yesterday--much to add--even when he was standing at the door with one hand on the knob, and the other, which held his hat, passing before his half-blinded eyes, covered by gray spectacles, in an effort to shield them from the light that came in too brightly from the window opposite. "It seems foolish to try to warn the wisest of men," said he with a cynical smile which, on his strange face, turned into a tragic grimace. "Especially when the warning comes from the most courageous of men," answered Giraldi.