At Pony's Home Candy wallows in her sorrow over Anthony's death. The new, bossy orphan Jimmy is fed up with Candy weeping her days away. He taunts her and calls her cry-baby. Finally, when Candy notices Miss Pony and Sister Lane raising money to buy Christmas gifts, she realizes she has neglected the orphans around her. Supportive of her, Miss Pony directs her to find her way back to life. Candy searches for Jimmy and finds him at the base of Father Tree crying and calling for his mother he lost so recently. The tough boy feels as alone and sad as Candy does. Jimmy challenges Candy to a race and tree-climbing contest to figure out who is the true orphan boss. Candy defeats him along with her anguish over Anthony's death. Meanwhile, Mr. Brown, Anthony's widowed father, visits the Ardley family to mourn his son and asks Archibald and Alistear to gather Anthony's things and give them to Candy. He also expresses the desire to meet her someday.