In June 1937, Jessup heads to North Beulah for the 40th anniversary of his graduation from Isiah College. Upon arriving, he finds that Loveland has been fired for being too radical. The president of the college, Peasely, claims that this was only due to overstaffing, but also tells Jessup that he has been named Director of Education for the district, and one of his new tasks is seeing that newspapers spread Corpo propaganda.

In September 1937, Jessup overhears a horrifying story about Dr Macgoblin, the Education Secretary. Macgoblin, after purging Columbia University of any academics suspected of not voting for Windrip, decides to go celebrate with his two bodyguards by drinking at every bar on 52nd Street in New York City. After becoming quite drunk, Macgoblin phones his former biology instructor, Dr. Schmidt. Macgoblin becomes enraged when he learns that Schmidt is out visiting a rabbi. Macgoblin and his bodyguards take a taxi to the rabbi’s house, where they demand whiskey. Schmidt tells Macgoblin he should be ashamed of himself for going from a promising academic to working for a fascist government. The rabbi calls Corpoism a cult. Macgoblin, filled with resentment, calls academics useless and seditious. Schmidt orders the men to leave; in response, Macgoblin murders them both.