Whilst Ross's cooperative has some success there are hard times throughout Cornwall and typhoid sweeps through Bodmin jail and kills Jim Carter just as Ross and Dwight break in to rescue him. Dwight is also called upon to visit the injured Keren, who throws herself shamelessly at the young doctor, as Demelza notices. Untouched by privation the Warleggans throw a ball where Francis, struggling to accept his reduced circumstances, neglects Elizabeth, allowing George to step in as her escort. Ross turns up drunk and confronts Halse, the magistrate who jailed Jim and then plays cards recklessly though he does expose his opponent as a card sharp, known to the Warleggans, who are now all the more determined to break him. Further scandal is caused by the arrival of Captain Blamey, who asks Verity to run away with him.

Ross faces ruin as, along with the rest of his collective, he must sell to the Warleggans' company at a nominal price. At the same time the disease known as putrid throat sweeps through the county, claiming many lives and Dwight, still contrite over Keren, throws himself into trying to treat it. Elizabeth and her family are stricken and Demelza goes to help them but infects herself and her daughter with disastrous results. Divine justice appears to intervene as the Warleggans' ship and its cargo founder on the rocks and Ross leads the villagers in collecting its spoils from the beach. Demelza recovers from her sickness, only to face another setback to her marriage.