The next scene shows two figures in profile speaking across a fancy restaurant table: the privileged, pretentious, brash and obstinate Terry and her white-haired, millionaire father, Henry Sims (Samuel S. Hinds). She has left home with burning convictions and starry-eyed rebellion against her moneyed family's wishes, to satisfy "this silly whim of yours" to be "another stage-struck girl" in the theatre:

Terry: If I thought that I couldn't achieve anything by myself without the aid of the family millions, I'd feel like a pretty sorry specimen.
Father: But why must it be the stage. There are other things to achieve in life.
Terry: I don't know why. It just happens to appeal to me. Why did Grandfather leave a comfortable home and go off pioneering into unknown country?
Father: He made sacrifices for a reason - so that his family could have economic security.
Terry: Security from what? So that I learn to play a mean game of bridge or ride the hounds or marry a polo player? Is that why Grandfather Randall endured all those hardships?
Father: But you've got the family name to consider.
Terry: Don't worry about the family name. As far as New York is concerned, Terry Randall is just another stage-struck girl from the Middle West. They don't know me from Eve. But they're going to if I have anything to say about it.
Father: I'm sorry, but I can't support you in this idea any longer.
Terry: Financially or morally?
Father: If you're going on with this notion, you've got to do it alone.
Terry: All right, then I'll have to do it alone.
Father: But if you're a failure, what then?
Terry: If I'm a failure, I'll be the first to admit it.
Father: But it may take years to find out.
Terry: Oh Dad, it may take years to know anything about anything. But I'm going to stick to it.
Father: Well, uh, are you too proud to come back home if you are a failure?
Terry: I haven't got that kind of pride.
Father: And you would come home if you failed?
Terry: Would you have me?
Father: Well, you're pretty stubborn, but you're still my favorite daughter.

In the audience at the Club Grotto nightclub, Harcourt (Franklin Pangborn), Powell's butler acts as a deceptive "stooge"/"escort" to provide a cover for his affair with Linda. Performing in the dance floorshow to "Put Your Heart Into Your Feet and Dance" are tap-dancing Annie and Jean, attired in sparkling black top hats, canes and outfits. Powell is enamoured of the new dancers: "A couple of cute kids, aren't they?" The snakish Linda denounces her fellow boarders: "Just a lot of riff-raff they pick up around town." Backstage, it dawns on Jean that their jobs were acquired because Powell "owns half-interest in this club."

Jean: You don't suppose he had anything to do with our being here.
Annie: That a girl, Sherlock. I betcha you could put two and two together and get somethin' out of it.
Jean: So that's it.
Annie: Oh, don't be a dope. If he smiled at me tonight the way he smiled at you, I'd do a three-point collapse.

Powell finds the tap-dancers in their dressing room and asks why Jean is so unapproachable: "You don't like me, do you?" The lecherous, flirtatious producer hints at casting Linda (his "friend's mother") aside and replacing her with his new, blonde object of affection. The hostile, wise-cracking young dancer reluctantly, and pragmatically, agrees to a dinner date, fearing that she will lose her dancing job if she doesn't kow-tow to her provider. And she is desirious of the lifestyle that she had begrudged rival Linda for experiencing:

Powell: My ideal 'Mother' is young, blonde, slim, and generally intriguing.
Jean: (with dead-pan delivery) I'll see if I can get you one for Mother's Day. How do you like them - tall, fat, round..?
Powell: Well, about uh, your size.
Jean: Well, that wouldn't be so easy. You see, I'm not the stock size.
Powell: Well, couldn't we talk the whole thing over at dinner some night?
Jean: Oh, I'm very fond of dinner. Do you suppose you could send your car around for me?
Powell: Where would I send it?
Jean: I'm living at the Footlights Club, but the traffic around there is rather heavy.
Powell: (grinning) I see.
Jean: So I think you'd better send it around here first.
Powell: Perhaps that would be better. Shall we say, uh, tomorrow night, after the show?
Jean: Mama will have a lamp in the window.

In the reception room of Mr. Powell's Theatrical Enterprises office, Judy and Eve wait patiently and remark that the producer is "out-of-town" - he's actually hiding behind closed doors away from eager auditioners and not "seeing anybody except by appointment." Kaye arrives for a scheduled appointment, expecting to read for the part of the lead in Enchanted April. The two confident hopefuls have wagered a lunch bet that Terry won't be able to "crash" Powell's office by two in the afternoon: "We're starting off with caviar, oh, not that small sturgeon kind but nice big whale caviar." Powell's secretary tells Kaye that her appointment has been cancelled due to "unexpected business" and she will have to reschedule again in the next week. After pleading for a moment, the weak, starving, frail and malnourished actress faints onto the floor just as Terry arrives. When she learns that "great-guy" Powell broke his "appointment with an actress to get his shoes shined," she becomes enraged and marches through Powell's door and reprimands him - while he's having his shoes shined - for his cavalier attitude:

Terry: By what right do you barricade yourself behind closed doors and refuse to see people?
Powell: That happens to be none of your business.
Terry: Do you know a girl just fainted in your outer office because you broke an appointment with her?
Powell: I'm sorry, I didn't know.
Terry: As long as you keep that door closed, you'll never know anything. You're a producer. You ought to see people. Why, the greatest actress in the world might be living out there fifteen feet away from you and you'd never even give her a chance!
Powell: Are you the greatest actress in the world?
Terry: Never mind about me, I don't need you, but those other girls do. They sweat and slave and go without food and decent clothes in the hope that someday, someone like you will come out of his office and notice them.

The chauvinistic, "smug" Powell labels her a "militant" who holds him "personally responsible for any possible tragedy in the lives of the girls" - desperate to see him for their big break. He defends his callous treatment of the aspiring, excitable, wanna-be "stage-struck damsel(s)":

Do you realize that if I saw all of the girls that came up here that I wouldn't have time for anything else?...Every year, about fifty thousand girls decide that they want to go on the stage for one reason or another. Well, forty-nine thousand, five hundred of them are wrong! They'd be much better off home washing dishes... [later] They'd be so much better off at home raising families.

Terry exits his office after sternly lecturing him about not having any common courtesy and lacking a conscience: "I doubt if you have a conscience."

Attorney Mr. Richard Carmichael (Pierre Watkin) arrives, representing an unidentified, wealthy client [Terry's father] who is "somewhat interested in the theatre" who would "like to dabble in show-business." But since Powell has already downgraded the unexperienced acting talents of Terry ("If she is (an actress), she's a pretty bad one - I can tell 'em a mile off"), Carmichael doubts that Powell would be supportive of his proposition. The scene fades to black without further elucidation.

After Terry's confrontation with Powell, Judy is willing to re-examine her estimation of the high-brow boarder: "I hate to say it, but I'm revising my opinion of her." A delivery of flowers for Ms. Maitland indicates Powell's change of heart toward Linda - noted by Eve: "It looks like there's a new Queen Bee buzzing around the hive." Terry secretly ordered a doctor to care for her weakened friend Kaye.

Competitively, the displaced, cast-aside Linda delivers the familiar box of flowers to Jean, and warns her about falling in love with ex-boyfriend Powell and succumbing to his practiced charm:

Linda: May I come in.
Jean: Oh sure, I guess you'll be safe. The exterminators won't be here 'til tomorrow.
Linda: How did they miss you on their last visit?
Jean: I was out in society with an old boyfriend of yours.
Linda: Oh yeah, speaking of funerals, these flowers just arrived for you.
Jean: And you brought them up? Oh, my little flower girl. If I could find my purse, I'd give you a big, five-cent tip.
Linda: I really came along to give you a tip. And don't bother to read the note. I'll tell you what it says. Eleven roses and the twelfth is you.
Jean: You're doing very well up to now. Tell me more.
Linda: His routine is pretty much the same with all the girls. It all ends up with a quiet little supper in his penthouse, with champagne and all the trimmings and the view and all that...I mustn't forget to tell you about the lighting effect. It's very good. It goes with that tired little boy routine. But I won't spoil it for ya. I'll let all that come as a surprise.
Jean: It must be galling to you older women to lose your meal ticket to younger riff-raff.
Linda: Just a leave of absence, dearie. And in the meantime, I have my lovely sable coat and my star-sapphire to keep me company.

Having overheard their conversation, Terry tries to dissuade her room-mate from "running around with that man Powell" - a "snake" - "Why play with fire just to spite Linda?" Jean understands that she is embarking into a liaison with the wealthy producer because of the realities of her poverty and her lack of other professional options:

Jean: Besides, if I don't go out with him, I'll probably lose my job and so will Ann, and I'll be right back where I started from.
Terry: Oh, now that's a rather lame excuse. You got along somehow before, didn't you?
Jean: I'm sick of getting along somehow.
Terry: Why don't you stick to your ideals - they're rather crude but they're all right.

Terry tells Jean, after she has noticed her wearing her own white ermine wrap - that she may borrow her expensive cloak for the time being:

You may as well go to perdition in ermine. You're sure to come back in rags.

Downstairs, Jean - with an air of affected, dignified sophistication while modeling the wrap - informs her penniless co-actresses that she is "dining tonight on pheasant bordelaise with peach-fuzz dressing...my friend wouldn't think of serving peasant..." Spiteful, Linda wisely advises her tempted friend: "It's one thing to borrow a friend's friend. It's another thing to hold him, if you know what I mean." With a dramatic flourish, Jean leaves for a dinner date with her new patron: "And when I return, I shall tell you how the other half lives." On the steps of the Footlights Club, she tells old friend Bill (William Corson) that she has a new romantic interest: "I don't think we'd better see each other for a while...I've got to live my own life from now on."

The studio mogul's luxurious penthouse is prepared, as Linda predicted, for Jean's arrival (and seduction) - incense is burning next to a flower-filled vase. The all-white furnishings are plumped up, romantic music plays, and the lights of the city twinkle through the large picture window. Harcourt swoops around and serves coffee, as already-tipsy (from champagne) Jean reveals how she is slowly becoming corrupted: "I wish I'd been born lucky instead of beautiful and hungry." She admires his beautiful view of the theatrical city:

Powell: It's a wonderful view, it's a beautiful city - just like a fairyland. It's full of color, romance, illusion, glamour.
Jean: Maybe it depends on which window you see it from.
Powell: Oh, you should see it only from here.
Jean: Do those lights keep you awake?
Powell: So far they haven't.
Jean: I love New York from up here. Looks all rouged and manicured and ready to go out for the evening.
Powell: You're quite a little philosopher, aren't you?
Jean: Oh, it's probably the champagne talking.

He speaks about his family through displayed photographs of his wife ("That's Mrs. Powell") and son on a white piano, and tells her that his wife will not accept a divorce:

Powell: We're not divorced or anything like that, and uh, that's Junior. Fine looking boy, isn't he? I never believe in making pretenses. Lots of men who are separated from their wives simply let it be understood that they're not married. Now I believe in this day and age that a man can have his home on the one hand and still live his own life. That is, any man of character.
Jean: Ah, that's big of you.

In an almost-comical, stereotypical, producer's-couch seduction scene, he takes her in his arm and leads her to the sofa: "There's a few things I want to talk over with you." More champagne is served, and Powell dims the lights to create a romantic, "restful" mood: "It does improve the view, doesn't it?" He sits down next to the dreamy ingenue on the couch and promises her fame - on a gigantic Broadway marquee:

Powell: Think of how much more beautiful it will be when your name is flashing across the horizon. Jean Maitland - (he gestures with his hands) in letters that big.
Jean: That big! (She triples the size of the letters)
Powell: All right, that big.
Jean: It's gotta be big enough to keep people awake. [She's referring to the flashing lights outside her boarding house.]
Powell: It will be big enough. I'll be the sculptor and you'll be the clay. I'll mold you into the greatest dancer that Broadway has ever known. (He takes her hand and caresses it) I'll be Pygmalion, you'll be Galatea.
Jean: It sounds like a fairy story.
Powell: It's like a fairy story, and aren't grown up people just little children at heart? Oh, I know at the office I'm gruff Anthony Powell, theatrical producer. That's a pose. Here with you, I'm just a tired little boy with a dream.
Jean: Who are you supposed to be?
Powell: (taken aback) Huh?
Jean: You were supposed to be somebody, and I was supposed to be somebody.
Powell: Pygmalion and Galatea.
Jean: (befuddled from too much drink) And who am I?
Powell: You're Galatea.
Jean: Am I Galatea?
Powell: Pygmalion was a sculptor who carved the statue of a woman out of marble. And the statue was so beautiful that he fell in love with it. And his love was so deep and tender and true that it warmed the statue into life. And they lived happily ever afterwards.
Jean: Did they get married?
Powell: (He drops her hand) No, I don't think people got married in those days.
Jean: (wimpering) Oh, I think that's terrible...They didn't get married.
Powell: But she was just a statue...You can't cry over a statue. The whole thing's a fairy story.
Jean: I know, but look at all the trouble he went through.
Powell: He didn't go to any trouble. (rising) You're just getting hysterical. And besides, he had a wife and son and couldn't get married anyway.

After she becomes upset that Pygmalion didn't marry Galatea (she exclaims: "he can't do that to her"), the producer realizes that she is a firm believer in marriage. Exasperated that she is crying "over nothing," Powell quickly summons Harcourt and hustles her home: "Don't you worry your pretty head about a thing. Harcourt will see you to your car. That's a good girl." He sighs with relief after getting her out of his apartment and then pages through his little black book for his next starlet-victim.