Josie’s arrival prompts Drew to reconsider his partnership with Fisk. In New York he can ignore most of Fisk’s improprieties, but Jersey City is a small town, and Taylor’s Hotel is even smaller. Josie’s fleshly presence affronts him, and when she and Fisk disport themselves like newlyweds on a honeymoon, Drew has to wonder where Fisk’s priorities lie. Drew attempts to improve the moral tone by attending a nearby church, but the example doesn’t take, and Fisk and Josie carry on as before.

The continuing confrontation with Vanderbilt doesn’t help Drew’s mood. Drew imagines that Vanderbilt will try to kidnap him and carry him back to New York’s jurisdiction; the Commodore has played rough before. So Drew has Fisk and Gould arrange security measures. They persuade the Jersey City police chief to position a special detail around the hotel; to this they add precautions of their own. Fisk hires four boats with a dozen armed men each to patrol the approaches to Jersey City lest Vanderbilt mount an amphibious assault. He enlists dozens more men from the gangs of the neighborhood to stand guard outside and within the hotel, which he jokingly dubs Fort Taylor.

The formidable appearance and dubious character of the impromptu Erie militia make Drew wonder whether the cure isn’t worse than the disease. He increasingly blames Fisk and Gould for his predicament. The stash of money aggravates the strain. Drew considers the $7 million his, since he is the principal shareholder of the Erie and the originator of the scheme by which the money has been acquired. Fisk and Gould believe they have a claim to substantial shares of the loot, as partners in the operation. They know Drew’s reputation for double-dealing; they request, then demand, their portions, which Drew declines to cede. The conspiracy starts to unravel.

And so, even as the trio entices the New Jersey legislature into incorporating the Erie as a New Jersey company, to make Vanderbilt think they might never return to New York, Drew gets word to the Commodore that he wants to make peace. Fisk and Gould are alert to such a defection, and Fisk monitors all mail, telegrams, and other messages entering and leaving the hotel. But Drew bribes a waiter to get a note past Fisk, and a meeting with Vanderbilt is scheduled.

One Sunday Drew leaves the hotel as if for a Sabbath stroll. Out of sight he slips to the waterfront, where a waiting boat carries him across the Hudson. Not trusting Vanderbilt, he has deliberately chosen Sunday, when arrests in civil cases are suspended. He takes a cab to Vanderbilt’s home in Washington Square. Drew attempts small talk as an icebreaking courtesy; Vanderbilt gruffly gets to the business at hand. They agree that the Erie war has lasted long enough, and they accept the need for a settlement. No details are discussed, and Drew remains edgy. He watches the clock, knowing that if he is still in New York at midnight, he risks being arrested. But he gets away from Washington Square in midevening, and he is across the Hudson before his skiff turns into a pumpkin.

Yet Fisk and Gould have noted his absence and divined his destination. When he returns they declare emphatically that they expect to be included in any subsequent negotiations. Drew explains that he was simply trying to look out for their interests—better than they could themselves, as he has been in the speculating game longer than they have. They don’t believe him. They watch him closely, and when he seems to be preparing to go back to New York again, they insist on joining him.

He still manages to lose them. He says that the meeting is at the Fifth Avenue Hotel but that he has to make a stop before going there. They should proceed; he will meet them. He turns instead toward the home of former judge Edwards Pierrepont, where Vanderbilt is waiting.

The two principals reach an agreement. Drew will retain control of the Erie and will keep the profits he has made on the run-up in the company’s share price, but the Erie will buy back the watered stock he and Fisk and Gould have sold Vanderbilt. Both sides will abandon their legal proceedings.

Drew and Vanderbilt are about to seal the pact when Fisk and Gould burst into the room. Vanderbilt roars with laughter to see Drew’s deception uncovered by his partners. Drew forces a smile and affects not to be upset. He asks Fisk and Gould to join the discussion. The terms are delineated.

Fisk balks at buying back Vanderbilt’s shares, complaining that it will cost the Erie millions. But Gould pulls him aside. They whisper together. Then they return to the table, and Gould, who till now has let Fisk do the talking, says he and Fisk will accept the deal on one condition: that Drew turn control of the company over to them.

Now Drew balks. He has gotten rich from the Erie, and he is loath to lose the chance to get richer still. But he is also reluctant to reopen the battle with Vanderbilt, who bellows delight at Drew’s discomfiture. And he realizes that Fisk and Gould can outvote him if the matter comes before the Erie directors. So he takes his money and walks away from the company, appreciating the irony that he has saved the Erie from his rival only to lose it to his friends.