Spade returns to his office, where Effie tells him about his phone calls - three from Iva, a call from the DA's office, and a call from a Mr. Gutman - saying that he had received Spade's message from "the young man." (In a moment of insight, Spade realizes that Mr. Gutman is the 'Fat Man.') Effie has also admitted Brigid into Spade's inner office where she is waiting for him. In his office, a distraught Brigid tells Spade that her apartment has been thoroughly searched ("Darling, somebody's been in my apartment. It's all upside down, every which way"). Spade suspects Cairo might have lied about the "police grilling" and ransacked her place in the meantime - he is still baffled by the twisting turns of the film's plot:

I've got to keep in some sort of touch with all the loose ends of this dizzy affair if I'm ever gonna make heads or tails of it.

With her "woman's intuition," Effie feels protective of Brigid (rating her as "all right") - having been beguiled by Miss O'Shaughnessy's persuasive smile and manner. Effie agrees to let the endangered Brigid stay at her own apartment for safekeeping since Brigid refuses to return to her own place. After he phones the DA's office to set up an appointment for 2:30 that afternoon, the dark image of Iva Archer shows up in front of Spade. "Mad, crazy with jealousy," Iva admits she sent the police to Spade's apartment the previous night and begs for his forgiveness. He wonders if she had murdered Miles and whether she has an alibi:

Spade: By the way, where were you the night Miles was murdered?
Iva: Home. (He disagrees by shaking his head.) I was!
Spade: No, but if that's your story, it's all right with me.

Impatient to deal with her and revealing his misogynistic tendencies, he sends her along on her way. His ringing phone brings an invitation to see Gutman immediately.

Spade proceeds to Gutman's hotel suite (Room 12C), where he is greeted at the door by Gutman's ferretty gunsel, Wilmer. [Cairo and Gutman are both members of an international gang of crooks.] Spade meets Cairo's partner, Kaspar Gutman or the 'Fat Man' (Sydney Greenstreet in his film debut at the age of 61), wearing a black penguin-like waistcoat. He puts both of his hands on Spade's right arm as he leads him to a chair. In their first meeting together, a classic scene, Gutman is supremely interested in retrieving the bird and outfoxing Spade, as he speaks in oratorical fashion and peppers his words with aphorisms. Likewise, Spade is intent on trapping Archer's killer and discovering how Gutman is involved in the conspiracy to acquire the falcon.

Gutman's great bulk (enormous gut) is emphasized by low-angle shots in front of a curtained window, and his cultured talk with impeccable manners conceals his disregard for everything but the bird. He pours Spade a stiff drink, emphasizes the importance of straight-talking, betrays some homosexual tendencies ("I'm a man who likes talking to a man...") and waits for Spade's reaction, but there isn't one. Spade explains that he is acting on his own behalf - he's not there "as Miss O'Shaughnessy's representative":

Gutman: We begin well, sir. I distrust a man who says 'when'. If he's got to be careful not to drink too much, it's because he's not to be trusted when he does. Well, sir, here's to plain speaking and clear understanding. (They drink.) You're a close-mouthed man.
Spade: No, I like to talk.
Gutman: Better and better. I distrust a close-mouthed man. He generally picks the wrong time to talk and says the wrong things. (Gutman offers Spade a cigar.) Talking's something you can't do judiciously unless you keep in practice. Now, sir, we'll talk if you like. I'll tell you right out - I'm a man who likes talking to a man who likes to talk.
Spade: Swell. Will we talk about the black bird?
Gutman (chuckling): You're the man for me, sir. No beating about the bush, right to the point. Let's talk about the black bird, by all means. But first, answer me a question. Are you here as Miss O'Shaughnessy's representative?
Spade: Well, there's nothing certain either way. It depends.
Gutman: It depends on? Maybe it depends on Joel Cairo.
Spade: Maybe.
Gutman: The question is, then, which you represent. It'll be one or the other.
Spade: I didn't say so.
Gutman: Who else is there?
Spade: There's me.
Gutman: Ah. That's wonderful sir, wonderful. I do like a man who tells you right out he's looking out for himself. Don't we all? I don't trust a man who says he's not.

In their competitive jockeying for position, Spade compliments Gutman for being the only one to fully understand the nature of the "black bird" and know its real value ("You know what it is"). Spade also reveals that he knows the bird's whereabouts, but waits for Gutman to release further information first. And then he has a temper tantrum - he smashes his drink glass to the floor, accuses Gutman of wasting his time, and storms out of the suite with a threatening ultimatum:

Spade: Uh-huh. Now, let's talk about the black bird.
Gutman: Lets. Mr. Spade, have you any conception of how much money can be got for that black bird?
Spade: No.
Gutman: Well, sir, if I told you - if I told you half, you'd call me a liar.
Spade: No, not even if I thought so. But you tell me what it is and I'll figure out the profit.
Gutman: (chuckles) You mean you don't know what that bird is?
Spade: Oh, I know what it's supposed to look like. (Coldly) And I know the value in human life you people put on it.
Gutman: She didn't tell you what it is? Cairo didn't either?
Spade: He offered me ten thousand for it.
Gutman (dismissively): Ten thousand. Dollars, mind you, not even pounds. Do they know what that bird is, sir? What is your impression?
Spade: Oh, there's not very much to go by. Cairo didn't say he did and he didn't say he didn't. She said she didn't, but, uh, I took it for granted she was lying.
Gutman: Not an injudicious thing to do. (Smiles with purpose) If they don't know, I'm the only one in the whole wide, sweet world who does.
Spade: Swell. When you've told me, that'll make two of us.
Gutman: Mathematically correct, sir, but I don't know for certain that I'm going to tell you.
Spade: Oh, don't be foolish. You know what it is and I know where it is. That's why I'm here.
Gutman: Well, sir, where is it? You see, I must tell you what I know but you won't tell me what you know. That's hardly equitable, sir. No, no, I don't think we can do business along those lines.
Spade (violently angry): (He tosses his cigar away in disgust) Now think again and think fast. I told that gunsel of yours you'd have to talk to me before you're through. I'm telling you now, you'll talk to me today or you are through! (Throwing his drink to the floor.) What are you wasting my time for? I can get along without you! And another thing: Keep that gunsel out of my way when you're makin' up your mind! I'll kill him if you don't, I'll kill him!
Gutman (calmly): Well, sir, I must say you have a most violent temper.
Spade (leaving): Think it over. You've got till 5 o'clock, then you're either in or out! For keeps!

Their conversation reaches a standoff because neither party is willing to divulge what he knows first. Feigning impatient greed, Spade is infuriated that Gutman will not reveal more about the bird and gives Gutman until later that evening to talk. Smiling and laughing to himself in the hallway while departing, Spade is self-satisfied with his dramatic false display of rage as a man with "a most violent temper." Yet he glances down at his hands at the elevator, noticing that they are visibly trembling as a result of his violent outburst. He enters a descending elevator just as Cairo steps off the other ascending car without seeing him.

In the next scene at the District Attorney's office after being pulled in, Spade is questioned about the two murders by a strait-laced Bryan (his responses are recorded by a stenographer), but he refuses to bend to any questions. He admits, however, that "Everybody has something to conceal." In a scene similar in tone to the one with Gutman, he tells them off with a provocative tone, knowing that they have nothing on him. He demands that the law leave him alone and not intimidate him any further so that he can continue his investigation into the murder cases and clear his name:

And as far as I can see, my best chance of clearing myself from the trouble you're trying to make for me is by bringing in the murderers all tied up. And the only chance I've got of catching them and tying them up and bringing them in is by staying as far away as possible from you and the police because you'd only gum up the works...Now if you want to go to the board and tell them I'm obstructing justice and ask them to revoke my license - hop to it! You tried it once before and it didn't get you anything but a good laugh all around...And I don't want any more of these informal talks. I have nothing to say to you or the police. And I'm tired of being called things by every crackpot on the city payrolls. So if you want to see me, pinch me or subpoena me or something and I'll come down with my lawyer. I'll see you at the inquest - maybe.

On a sunny street outside his office building, Spade is summoned by Wilmer to meet with Gutman again. Presumably, the 'Fat Man' has decided to reveal the mystery of the bird. Wilmer, a caricature of a young-faced killer, an adolescent in a world of real killers, conceals his guns with his hands stuck in his coat pockets. Spade enjoys needling the weak gunman. Wilmer threatens Spade after another insult:

Wilmer: Keep on ridin' me. They're gonna be pickin' iron out of your liver.
Spade: (laughing) The cheaper the crook, the gaudier the patter, huh?

In the hotel corridor outside Gutman's hotel room suite, Spade moves behind Wilmer and uses the gunsel's own coat to pin his arms and then take his guns away. He tells a disgruntled Wilmer: "Come on. This will put you in solid with your boss." In front of Gutman, he embarrasses and humiliates the bungling Wilmer by handing the weapons over to the gunman's boss, explaining: "Here. You shouldn't let him go around with these. I know he might get himself hurt...A crippled newsie took 'em away from him, but I made him give them back!" Gutman appreciatively compliments Spade with a deep belly laugh - and one of his many trademark 'by gad' statements [Censors had replaced the screenplay's 'By God']:

By gad, Sir. You are a chap worth knowing, an amazing character...

Gutman, now wearing a robe with silk lapels, dismisses Wilmer to the back room and again sits down with Spade. Over drinks (that are replenished by Gutman), they "talk about the black bird." Spade finally learns from the eloquent criminal all about the exotic history, origin, and value of the valuable black bird statuette. It was made in 1539 from gold and jewels from the coffers of the crusading Knights of Rhodes (the order of the Hospital of St. John of Jerusalem): "We all know the Holy Wars to them were largely a matter of loot." Buccaneer pirates stole the jewel-encrusted bird when it was sent by galley ships from the Knights of Rhodes to Emperor Charles V of Spain, as a tribute, in appreciation for his granting them the island of Malta: "It never reached Spain." Then in 1713 after its long disappearance, the bird turned up again in Sicily. In 1840, it re-appeared in Paris, where by that time, it had acquired a painted coat of black enamel "so that it looked nothing more than a fairly interesting black statuette." Afterwards, it "kicked around Paris for over three score years by private owners too stupid to see what it was under the skin."

Years later in 1923, a Greek antique dealer found the falcon in an "obscure shop" and recognized its real value. While researching the bird's history, the dealer re-enameled the bird with another coat of black paint. The dealer's establishment was burglarized and he was murdered - and the falcon was stolen again, before Gutman could acquire it. Gutman reveals that in his passionate, obsessive quest for the last 17 years ("I'm a man not easily discouraged when I want something"), he has been trying to locate the bird - and often has just missed getting his hands on it. The falcon was then traced to the home of a Russian general (named Kemidov) in an Istanbul suburb. Gutman offered to purchase it and sent hired agents [Brigid and Thursby] to get it, but failed because they betrayed him:

I made him an offer, so I sent him some - ah, agents, to get it. Well, sir, they got it - and I haven't got it - BUT I'm going to get it.

Gutman believes that the owner of the black bird with "a clear title" is the one who owns it "by right of possession." He sits next to Spade, touches his knee repeatedly, and learns that Spade can produce the bird in a couple of days. So the Fat Man promises to offer Spade $50,000: $25,000 for the bird's delivery and either another $25,000 later on or one-fourth of the proceeds from its sale (the more valuable of the two options). He gloats while speculating on the bird's real value - possibly between a quarter of a million and a million dollars:

Gutman: That would amount to a vastly greater sum.
Spade: How much greater?
Gutman: Who knows? Should we say a hundred thousand? Would you believe me if I name a sum that seems a probable minimum?
Spade: Why not?
Gutman: What would you say to a quarter of a million?
Spade: And you think the dingus is worth a million, huh?...That's a lot of dough....Minimum, huh? What's the maximum?
Gutman: The maximum I refuse to guess. You'd think me crazy. I don't know. No telling how high it could go, sir. It is the one and only truth about it.

As Spade thinks of his options and ponders the falcon's vast worth, his vision unexpectedly blurs. Drugged by Gutman during the long, drawn-out tale so that the knockout drug will take effect, Spade stands up, staggers, lurches forward and knocks into a small flower table as he grabs his hat. Wilmer is called from the back room - he trips the unsteady Spade and sends him sprawling to the floor where he passes out before he can leave. As the conspirators (Cairo, Gutman, and Wilmer) hastily depart in search of the black bird, Wilmer savagely kicks Spade in the right side of his head.

Later on after several hours (darkness has fallen), Spade regains consciousness. He calls Effie to discover that Brigid didn't show up as planned. When he tells her to go to his office, he adds some scolding ("Let's do something right for a change"). In a search of Gutman's hotel suite, Spade finds a vital clue - a newspaper clipping with a notice of Shipping News. Under "Arriving Today," 5:35 pm - La Paloma from Hong Kong has been circled. Spade rushes to the docks just in time to find that the abandoned ship is on fire. One of the dock officers (Emory Parnell) tells Spade that the crew and passengers have survived. Spade then returns to his office, where Effie tends to his bruised face, and he speculates that he was bluffed: "Maybe they went down to the ship, maybe they didn't."

Suddenly, a gaunt, dying man with a black hat pulled down over his face staggers into Spade's inner office to deliver the black bird, crudely wrapped in newspapers. Effie screams. As he clutches and then drops the bundled-up bird, collapsing dead, the man murmurs: "You know...the falcon." Spade searches the wallet of the dead man who has been shot to death and discovers it is La Paloma's Merchant Marine Captain Jacobi. [Walter Huston, director Huston's father and a veteran character actor, unbilled in the credits, appears in the cameo role as a good luck gesture for his son's directoral debut. He would re-appear as one of the main characters in his son's The Treasure of the Sierra Madre (1948), and between the two of them, they won three of the film's four Academy Awards nominations.] With a wide, lascivious grin, affected like so many others on the search for the bird, Spade unwraps the newspapers. Revealing that he isn't much unlike the other villainous and greedy characters, he exults to Effie that he possesses the valuable, coveted statuette: "We've got it, angel. We've got it." He simultaneously grabs Effie's wrist, causing her pain, as she squirms: "You're hurting..."

While they discuss this turn of events, Brigid phones, and gives her location: 26 Ancho Street in Burlingame. But then she screams, signalling that she is in trouble - and the line goes dead. Effie interprets that she is in danger and needs Spade's immediate assistance ("Go help her, Sam"). She thinks that the Captain was helping Brigid and they killed him, and Brigid is the next target. Spade orders Effie to call the police after he is gone and tell them how the captain died - but omitting the part about the falcon ("the bundle"). As Spade leaves, he pats Effie on the arm: "You're a good man, sister."

Spade takes the newspaper-wrapped falcon under his arm to a baggage parcel area of the Union Bus Terminal and checks it, then mails himself the claim check stub - addressed to his own postal address at Box 589, P. O. Station C. in the City. Spade hires a taxi to take him to rescue Brigid at 26 Ancho Street, but it is revealed to be an empty lot (for sale) next to a Grocery and Meat Market. He suspects that she tricked him with a fake address - a "bum steer" and "hooey" to get him out of the way. Spade realizes that Brigid has always been a psychopathic liar and that she is as deeply involved in the pursuit of the bird as everyone else.

When he returns and is entering the outer doors of his San Francisco apartment, Spade finds a weakened and breathless Brigid waiting (and hiding) for him in a doorway up the street. The two of them head up the elevator to his apartment - when he flicks on the lights, Wilmer is hiding and lying in wait with gun drawn behind the front door. Gutman (seated) and Cairo are in the living room waiting for them.

Cleverly, he brings together the alliance of self-interested, greedy falcon-seekers to find out the true story. In the tense, final sequence in Spade's apartment, Wilmer wants to frisk Spade, but he won't allow it: "Take your paws off me or I'll make you use that gun. Ask your boss if he wants me shot up before we talk." Gutman calls off his gunsel: "Never mind, Wilmer." Tempted by the financial allure of the bird, Spade asks for his first payment for the falcon ("Are you ready to make the first payment, and take the falcon off my hands?") - Gutman tests Spade and hands him an envelope with $10,000 - less than the $25,000 promised earlier. Gutman tells Spade why the cash he is handing him is far less than he offered earlier:

Gutman: Yes, sir, we were, but this is genuine coin of the realm. With a dollar of this you can buy ten dollars of talk. And they're more of us to be taken care of now.
Spade: That may be, but I've got the falcon.
Cairo: (sternly) ...you may have the falcon, but we certainly have you.

Rather than talk about money issues, Spade is more concerned about finding a believable "fall guy" - someone that the police can pin the murders on. [Spade counts three murders - including the Captain's killing. But Cairo counts only two - Thursby killed Archer.] Spade shrewdly proposes two-bit gunsel Wilmer as an appropriate, logical choice for a 'fall guy':

Spade: I'm in this up to my neck, Gutman. I've got to find somebody - a victim - when the time comes. If I don't, I'll be it. Let's give 'em the gunsel. He actually did shoot Thursby and Jacobi, didn't he? Anyway, he's made to order for the part, look at him. Let's give him to 'em.
Gutman: (bursting out laughing) By gad, sir, you are a character, that you are. There's never any telling what you'll say or do next, except that it's bound to be something astonishing.

At first, Gutman refuses to hand over Wilmer - feeling indebted to his 'son.' [At the time of the novel's writing by Hammett, 'gunsel' strictly meant a young homosexual partner kept by an older man. Its meaning was stretched in the film to include Wilmer's function as a gun-toting bodyguard.]

I feel towards Wilmer here just exactly as if he were my own son.

He is concerned that Wilmer would tell police "every last detail" about the falcon. But Spade reassures Gutman that the police won't listen to Wilmer in their eagerness to convict him ("I'll guarantee you nobody will do anything about it"). Wilmer is quietly seething with internal rage at Spade for even suggesting his guilt: "Mighty funny." Sam reassures Brigid who sits nervously to the side: "How do you feel now, any better precious?...Don't be [frightened]. Nothing very bad is going to happen here." Spade convinces Gutman that the DA "standing on his head" could easily convict Wilmer. The gunsel is infuriated by this ultimate threat and moves close to Spade with his gun:

Get up on your feet. I've taken all the riding from you I'm gonna take. Get up and shoot it out.

After Gutman calls off Wilmer and refuses to give him up, Spade suggests other fall-guy alternatives - he nominates Cairo - and even Brigid:

Spade: (pointing) Give them Cairo.
Gutman: (chuckling) Well, by gad, sir.
Cairo: (incensed) And suppose we give them you or Miss O'Shaughnessy? How about that, huh?
Spade: You want the falcon. I've got it. The fall guy's part of the price I'm asking. As for Miss O'Shaughnessy, if you think she can be rigged for the part, I'm perfectly willing to discuss it with you.

When Gutman threatens to torture Spade (a "means of persuasion") to find the falcon's location, Spade cleverly negotiates and bets that Gutman won't gamble foolishly and kill him. To get at the truth, Spade realizes the fine line he is walking as he pragmatically analyzes the delicacy and dangerous nature of his alternatives:

Spade: If you kill me, how are you gonna get the bird? And if I know you can't afford to kill me, how are you gonna scare me into giving it to you?
Gutman: Well, sir, there are other means of persuasion besides killing and threatening to kill.
Spade: Yes, that's, that's true. But - they're none of 'em any good unless the threat of death is behind them - do you see what I mean? If you start something, I'll make it a matter of your having to kill me or call it off.
Gutman: (chuckling) That's an attitude, sir, that calls for the most delicate judgment on both sides. 'Cause as you know, sir, in the heat of action, men are likely to forget where their best interests lie and that their emotions carry them away.
Spade: Then the trick from my angle is to make my play strong enough to tie you up, but not make you mad enough to bump me off against your better judgment.
Gutman: By gad, sir, you are a character.

Cairo whispers into Gutman's ear - lending his final judgment to Spade's suggestion to give up Wilmer. Spade announces the stakes:

(To Wilmer) Six, two and even, they're selling you out, sonny. (To Gutman) I hope you're not letting yourself be influenced by the guns these pocket-edition desperados are waving around, because I've practiced taking guns away from these boys before so we'll have no trouble there.

Acutely paranoid that he is going to be offered up by his side, a furious Wilmer (after being called a "pocket-edition desperado" by Spade) again threatens Spade with his gun. Spade, who correctly claims that he had "practiced taking guns away from these boys before," knocks him out cold and confiscates his gun. In an agreed-upon exchange, Gutman will give up Wilmer as the fall guy and Spade promises to deliver the "dingus" the next morning. Gutman summarizes their deal:

In exchange for the $10,000 and Wilmer, you'll give us the falcon and an hour or two of grace...