Two clangs of a blacksmith working at an anvil are heard to anticipate the next scene - sparks fly during a visit to the noisy Morgan Motor factory. As the Ambersons' fortunes decline, Eugene's fortunes begin to rise. Escorting an excited Isabel and Aunt Fanny along with Lucy and George, Eugene introduces his first Morgan auto, displayed museum style with a canopy hood: "Remember this. Our first machine. The original Morgan Invincible." [It is an original 1893 Steam Motor Car.]

Isabel: I remember.
Aunt Fanny: How quaint!

Next to it, to convey the passage of time, is a more recent Morgan Motor Car. Lucy realizes how proud her father is, as he is carried away by the delighted guests, especially Isabel: "Did you ever see anything so lovely...as your mother [Isabel] - she's a darling, and Papa looks as if he were going to either explode or utter loud sounds." Eugene stands between Isabel and Fanny, paying attention only to Isabel and ignoring Fanny. As Fanny looks adoringly at Eugene, he tells Isabel that he is considering reviving his writing of poetry, and then he thanks them:

Isabel: It makes us all happy Eugene. Give him your hand, Fanny. There. If brother Jack were here, Eugene would have his three oldest and best friends congratulating him all at once. We know what brother Jack thinks about it, though.
Eugene: I used to write verse about twenty years ago. (To Isabel) Remember that?
Isabel: I remember that too.
Eugene: I'm almost thinking I could do it again. To thank you for making a factory visit into such a kind celebration.

[The next beautiful scene appeared much later in the original film where it was much more appropriate.] After the death of Wilbur, Eugene is now free to pursue Isabel, and she is freer to respond to his love. In the garden of the Ambersons' mansion, Eugene and Isabel sit under a tree, where he takes her hand and encourages her to tell Georgie of their love:

Eugene: Isabel, dear.
Isabel: Yes, Eugene.
Eugene: Don't you think you should tell George?
Isabel: About us?
Eugene: Yes.
Isabel: There's still time.
Eugene: I think he should hear it from you.
Isabel (lovingly): He will, dearest. Soon. Soon.

[The following scene appeared directly after the scene of the automobile factory visit in the original film.] In one of his horseless carriages, Eugene takes Isabel and Aunt Fanny for a ride down the main street of town. They are followed, with a very long tracking shot, of George in his run-about, horse-drawn carriage with Lucy as they travel along (signboards behind them identify "Middletown Hardware Co.," "Elite Cleaners and Dyers," "Telegraph Office," "Perkis Construction Co.," a "Pool and Billiard Hall," and "Barber Shop: Tony Gentry, Prop."). George, who has been smitten by Lucy, proposes to her, but she rejects him because he boastfully refuses to go into a business or profession, settle down, and earn a livelihood:

Lucy: I know when you make him (the horse) walk, it's so you can give all your attention to proposing to me again...
George: Lucy, if you aren't the prettiest thing in this world. When are you going to say we're really engaged?
Lucy: Not for years, so there's the answer.
George: Lucy dear, what's the matter? You look as if you're gonna cry. You always do that whenever I can get you to talk about marrying me.
Lucy: I know it.
George: Well why do you?
Lucy: One reason is because I have a feeling it's never gonna be.
George: You haven't any reason?
Lucy: It's just a feeling. I don't know. Everything's so unsettled.
George: ...What's unsettled?
Lucy: Well for one thing, George, you haven't decided on anything to do yet. Or at least if you have, you've never spoken of it.
George: Lucy, haven't you perfectly well understood that I don't intend to go into a business or adopt a profession?
Lucy: Then, what are you going to do George?
George: Why, I expect to lead an honorable life. I expect to contribute my share to charities, and take part in, well, in movements.
Lucy: What kind?
George: Whatever appeals to me.

George blames Lucy's rejection of him on the ideals of her father Eugene that have adversely influenced her views toward him: "Isn't it your father's idea that I have to go into a business, and you oughtn't to be engaged to me until I do?" Independent-minded Lucy denies ever having spoken to Eugene about the issue. Vindictive toward her successful entrepreneurial father, he asserts:

Do you think I'd be very much of a man if I let another man dictate to me my own way of life?...I don't believe in the whole world scrubbing dishes, selling potatoes, or trying law cases. No, I dare say I don't care any more for your father's ideals than he does for mine.

To carry forward the symmetry, George's carriage passes a shabby, dark coach carrying Uncle Jack and Major Amberson. [The scene appears to come out of nowhere, hanging in mid-air without any reference point, because of heavy editing.] With dark lighting evoking a death-like hearse, they are discussing George's flamboyant spending of money, obliquely referring to the financial difficulties of the Major and the effect the town is having on him:

Uncle Jack: Your grandson. Last night, he seemed inclined to melancholy.
Major Amberson: What about? Not getting remorseful about all the money he spent at college, is he? I wonder what he thinks I'm made of.
Uncle Jack: Gold, and he's right about that part of you, father.
Major Amberson: What part?
Uncle Jack: Heart.
Major Amberson: I suppose that may account for how heavy it feels nowadays, sometimes. This town seems to be rolling right over that old heart you mentioned just now, Jack. Rolling over us and burying us under.

At a dinner party held at the Ambersons in a visually striking scene [the dining room scene is cinematographically superb - dramatically filmed with a wide-angle lens that creates an extreme depth-of-field, and filled with images containing contrasting areas of light and dark], Eugene has been invited as a guest of the Ambersons - the six characters are seated on the ends and sides of the table. The scene, with quickly-cut shots, begins when George suffers embarrassment over his relationship with Lucy:

Isabel: Lucy's on a visit, Father. She's spending a week with a school friend.
Eugene: She'll be back Monday.
Aunt Fanny: (Aunt Fanny leans out from behind George and goads him about Lucy) George, how does it happen you didn't tell us before? He never said a word to us about Lucy going away!
Major Amberson: Probably afraid to. Didn't know that he might break down and cry if we tried to speak of it, isn't that so, Georgie? (He laughs at George)
Aunt Fanny (to George): Or didn't Lucy tell you that she was going?
George: She told me!
Major Amberson: At any rate, Georgie didn't approve. I suppose you two [George and Lucy] aren't speaking again. Ha, ha, ha, ha.

As the scene continues, Jack asks Eugene about talk that someone else is competitively opening up a horseless carriage shop somewhere out in the suburbs. Eugene, who has spurred the development of the automobile industry through his life's work, responds that an automobile revolution has begun that will change life in the growing city. The "devilish machines" would not, as thought, bring more commerce to the center of the industrial cities, but instead establish suburbs in the outlying areas where those who could afford it would move. During after-dinner conversation, George (embarrassed and angered over the topic of Lucy) becomes deliberately rude, discourteous, critical, and offensive toward Eugene, whom he believes disapproves of his marriage to Lucy:

Eugene: Automobiles will carry our streets clear out to the county line.
Uncle Jack: Oh, I hope you're wrong. Because if people go to moving that far, real estate values here in the old residence part of town will be stretched pretty thin.
Major Amberson: So your devilish machines are gonna ruin all your old friends, eh Gene? Do you really think they're gonna change the face of the land?
Eugene: They're already doing it, Major. It can't be stopped. Automobiles...
George: Automobiles are a useless nuisance.
Major Amberson (reprimanding): What did you say George?
George: I said, 'Automobiles are a useless nuisance.' Never amount to anything but a nuisance. They had no business to be invented.
Uncle Jack (rebuking): Of course you forget Mr. Morgan makes them. Also did his share in inventing them. If you weren't so thoughtless, he might think you're rather offensive.

The individuals around the table struggle with their bewildered reactions to the attack that George has perpetrated upon Eugene's enterprise. Remarkably tolerant, gentle, restrained, and non-vindictive, industrialist/entrepreneur Eugene is uncharacteristically kind toward George's self-centered, conceited, crass, bad-mannered, antagonistic insult. With composure and reflection as he strokes a spoon, he elegantly and beautifully delivers a very significant speech, philosophising about the growth of the new invention: the automobile, admitting that there may be dangers inherent in progress:

I'm not sure George is wrong about automobiles. With all their speed forward, they may be a step backward in civilization. It may be that they won't add to the beauty of the world or the life of men's souls. I'm not sure. But automobiles have come. And almost all outward things are going to be different because of what they bring. They're going to alter war and they're going to alter peace. And I think men's minds are going to be changed in subtle ways because of automobiles. And it may be that George is right. It may be that in ten or twenty years from now, if we can see the inward change in men by that time, I shouldn't be able to defend the gasoline engine but would have to agree with George: that automobiles had no business to be invented. (The sound of the dropping of the spoon in his hand to the table signals the end to his thoughts.)

After a pause, Eugene excuses himself from the table and departs for his automobile shop. Feeling empathetic to Eugene, Isabel mildly rebukes her son with deeply felt emotion:

Isabel: Georgie dear, what did you mean?
George: Just what I said.
Isabel: He was hurt.
George: I don't see why he should be. I didn't say anything about him. He didn't seem to me to be hurt. He seemed perfectly cheerful. What makes you think he was hurt?
Isabel: I know him.

Uncle Jack believes George is an enigmatic "puzzle" for his style of courtship of Eugene's daughter. [Indeed, throughout the film, troubling questions are continually raised - why is Eugene such a vile threat for George, and why doesn't Isabel really stand up to George and insist on a union with Eugene?]:

Well, it's a new style of courting a pretty girl, I must say, for a young fellow to go deliberately out of his way to try to make an enemy of her father by attacking his business. By jove, that's a new way of winning a woman.

Following the dinner party, in the hall of the Amberson mansion, Fanny, who has witnessed George's behavior, speaks to him, at first approving of him for his outrageous behavior at the dinner table. [This is the first of two scenes between George and Fanny on the staircase.] The camera - in a long, single take of almost three minutes, follows them as they climb to each of the successive landings of the staircase where stained-glass windows are labeled "Faith," "Hope," "Charity," "Music," and "Poetry." A self-pitying Fanny confesses her loneliness following her brother Wilbur's death, and then reveals that Isabel never really cared for any other man in her life but Eugene. She strategically lets slip the idea that the romance between Eugene and Isabel caused gossip throughout the entire town. Over-reacting, George becomes infuriated and suspicious:

Fanny: George! You've struck just the right treatment to adopt. You're doing just the right thing.
George: (He turns his back on her and tries to walk away.) Oh, what do you want?
Fanny: Your father would thank you if he could see what you're doing.
George: Why the mysterious detective business? You make me dizzy!
Fanny: You don't care to hear that I approve of what you're doing?
George: For the gosh sakes, what in the world is wrong with you? (Fanny starts climbing the stairs.)
Fanny (bitterly): Oh, you're always picking on me, always! (George pursues her up the stairs.) Ever since you were a little boy!
George (scornfully): Oh, my gosh!
Fanny: You wouldn't treat anybody in the world like this, except old Fanny! 'Old Fanny,' you say, 'It's nobody but old Fanny, so I'll kick her. Nobody'll resent it. I'll kick her all I want to!' And you're right. I haven't got anything in the world since my brother died. Nobody. Nothing!
George: Oh, my gosh!
Fanny: I never, never in the world would have told you about it or even made the faintest reference to it...(She moves out of the frame, still talking) if I hadn't seen that somebody else had told you, or you'd have found out for yourself in some way.
George: Somebody else had told me what?
Fanny: How people are talking about your mother. (George climbs the stairs to the next landing and stops in front of Fanny.)
George (severely): What did you say?!
Fanny: Of course, I understood what you were doing when you started being rude to Eugene. (Fanny starts ascending the next flight of stairs with George following.) I knew you'd give Lucy up in a minute if it came to a question of your mother's reputation.
George: Look here! (She stops, turns around, and watches George from above.)
Fanny: ...because you said...
George: Look here! Just what do you mean?
Fanny: I only wanted to say that I'm sorry for you, George, that's all. But it's only old Fanny, (Fanny turns and continues up the stairs with George following up to the next landing.) so whatever she says, pick on her for it. Hammer her! Hammer her!
George: Jack said...(They stop in front of the balustrade.)
Fanny (hysterically): It's only poor old lonely Fanny!
George (furiously): Jack said that if there was any gossip, it was about you! He said people might be laughing about the way you ran after Morgan, but that was all.
Fanny: Oh yes, it's always Fanny, ridiculous old Fanny, always, always! [Earlier in the snowy ride in the snow scene, Eugene had called Isabel 'divinely ridiculous', although the meaning of the word in these two contexts is quite different.]
George: Listen. You said mother let him come here just on your account, and now you say...
Fanny: He did. Anyhow, he liked to dance with me. He danced with me as much as he did with her...
George: You told me mother never saw him except when she was chaperoning you.
Fanny: Well, you don't suppose that stops people from talking, do you? They just thought I didn't count! 'It's only Fanny Minafer,' I suppose they'd say. Besides, everybody knew he'd been engaged to her.
George: What's that?
Fanny: Everybody knows it. Everybody in this town knows that Isabel never really cared for any other man in her life.
George: I believe I'm going crazy. You mean you lied when you told me there wasn't any talk?
Fanny: It never would have amounted to anything if Wilbur had lived.
George: You mean Morgan might have married you?
Fanny: No, because I don't know that I'd have accepted him.
George: Are you trying to tell me that because he comes here and they see her with him, driving and all that, they think that they were right in saying that she was, she was in love with him before, before my father died?
Fanny: Why, George! Don't you know that's what they say? You must know that everybody in town...

With convincing theatricality and cunning, self-pitying and gossipy Fanny successfully plants suspicions in George's head, convincing him of her manufactured version of reality. George is forcefully incensed that Isabel had once been engaged to Eugene, and that gossips in the town talk of Eugene's love for his widowed mother. Fanny also manipulates his jealousy toward Morgan. (George didn't know that Eugene had been calling for Isabel's romantic attention, not Fanny's, or that his mother may have loved Eugene while Wilbur was alive.) Thinking that one of Fanny's friends, Tully Johnson, is the source of the malicious gossip about his mother, George impulsively feels he must defend his mother's honor/reputation and rise to action. He hysterically rushes out to confront the neighbor. He slams the door as Fanny screams in a panic from the top landing: "What are you going to do, George?"

Mrs. Johnson, a straight-laced old woman, opens up her parlor door to her living room and welcomes George in, incorrectly identifying him for the second time in the film [at the ball, Lucy called him Mr. Amberson]: "Mr. Amberson, ha, ha, I mean Mr. Minafer." As the camera glides through the door and into her cluttered living room, George begins to assail her, charging her with spreading gossip with other neighbors about "a scandal" that involved his mother's name. At first agreeing that the issue is "a topic of comment about town," she then defends herself: "Really, this isn't a courtroom, and I'm not a defendant in a libel suit!" She orders him out of her house ("Please to leave my house").

In the next scene, introduced with a spitting tap in a bath tub (to aurally accentuate the folly of George's behavior), Jack bathes in an Amberson bathroom. George, who is positioned in front of a mirror (with a reflection of Jack in the tub seen in the mirror) is criticized by Jack: "Oh, now you have done it!" George is astounded that Jack can "speak so calmly" of a possible marriage between Eugene and Isabel: "That you can sit there and speak of it! Your own sister!"

When Eugene arrives on his motorcar and walks up the front walk to the Amberson house to call on Isabel for a drive, George watches his approach with a pugnacious look from the upstairs, lace-curtained window. At the door, George - playing the role of Sam the butler - refuses to allow him to enter and turns him away from the house:

My mother will have no interest in knowing that you came here today or any other day...You're not wanted in this house, Mr. Morgan, now or at any other time. Perhaps you'll understand this. (He slams the door.)

[George's words that forbid Eugene's entrance echo and repeat what the butler had twice told Eugene at the beginning of the film - "Miss Amberson ain't at home to you, Mr. Morgan."] After slamming the door in Eugene's face (shot from within the mansion), George stands watching a mute and stunned Eugene behind the frosted window pane. In not accepting Eugene's passion for his mother, George simultaneously causes two tragedies to befall his own life. He hastens the declining state of his own mother's health and her eventual death, and severs his own ties with Lucy, for she remains faithful to her father.

A marvelous crane shot rises up the interior of the Amberson staircase, as George and Fanny, on different landings, overhear Uncle Jack in the hallway tell Isabel that he has just come from Eugene. Fanny whispers loudly to George and then condemns him:

I can just guess what that was about. He's telling her what you did to Eugene...You're not going in there!...You keep away from here...Go on to the top of the stairs. Go on! It's indecent, like squabbling outside the door of an operating room. The idea of you going in there now. Just telling Isabel the whole thing. Now you stay here and let him tell her. He's got some consideration for her...

And then Aunt Fanny expresses her role in troubling and stirring up George, and thereby hurting Isabel:

I thought you already knew everything I did. I was just suffering...Oh, I was a fool. Eugene never would have looked at me, even if he'd never seen Isabel. And they haven't done any harm! She made Wilbur happy. She was a true wife to him as long as he lived. Here I go, not doing myself a bit of good by him, I'm just ruining them.

When Uncle Jack leaves Isabel, Fanny warns George: "Leave her alone."

Eugene sits at a desk on which rests a model of a motorcar to the right, and dogs on the left. He writes a letter to Isabel, asking if she will choose her oedipal son or stand up against him ("Will you live your life your way, or George's way?"). And he begs Isabel to not symbolically strike him dead a second time. He looks over the paper as his voice-over reads its contents:

Dearest One
Yesterday, I thought the time had come when I could ask you to marry me and you were dear enough to tell me, 'Sometime it might come to that.' Now, we are faced, not with slander, not with our own fear of it, because we haven't any, but someone else's fear of it, your son's. Oh dearest woman in the world, I know what your son is to you and it frightens me. Let me explain a little. I don't think he'll change. At twenty-one or twenty-two, so many things appear solid, permanent, and terrible, which forty sees as nothing but disappearing miasma. Forty can't tell twenty about this. Twenty can find out only by getting to be forty. And so we come to this, dear. Will you live your life your way, or George's way? Dear, it breaks my heart for you, but what you have to oppose now is your own selfless and perfect motherhood. Are you strong enough, Isabel? Can you make a fight? I promise you that if you will take heart for it, you will find so quickly that it's all amounted to nothing. You shall have happiness and only happiness. I'm saying too much for wisdom, I fear. And oh my dear, won't you be strong? Such a little short strength it would need. Don't strike my life down twice, dear. This time I've not deserved it.