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Before going to Gutman’s hotel, Spade stops at a bus station to store the falcon in a locker. He then mails the key to his apartment and catches a taxi to the hotel. Gutman’s door is answered by his daughter, Rhea, who has clearly been drugged. Spade helps her into the apartment and discovers that she has been keeping herself awake by poking and scratching herself with a bouquet-pin. Rhea manages to mumble an address in Burlingame and intimates that Gutman, Cairo, and Wilmer have taken O'Shaughnessy there and intend to kill her. Spade lays her down in her bed and calls the emergency line at the hospital to get them to take care of her. Spade has the hotel order him a surreptitious taxi driver and heads toward the address Rhea gave him.
The address is for an empty house in the suburbs with a for-sale sign. After looking around and seeing no signs of anyone, Spade heads to the real-estate dealer listed on the sign to get the keys. After searching inside the house, Spade determines he must have been tricked because the place is empty and has been for weeks. Back at the hotel, the front-desk clerk informs Spade that people from the emergency hospital showed up at Gutman’s room, but there was no one there.
Spade checks in with Effie at her mother’s house. He explains the phone call was a fake, and Effie confirms that the police questioned her but there was no trouble. When he finally arrives home, O'Shaughnessy emerges from a nearby doorway and embraces him. She is visibly shaken and distraught, and he helps her upstairs to his apartment. As they open the door and walk in, the lights flick on and Gutman, Cairo, and Wilmer are waiting for them.
Despite all the guns pointed at him, Spade remains calm and refuses to allow Wilmer to frisk him. Gutman lets it go and admits that he used his daughter to distract Spade while they looked for Jacobi and O'Shaughnessy. They begin to discuss the falcon, with Spade telling Gutman he can have it by the morning and ready to trade it for the previously agreed-upon amount of $50,000. Gutman offers him an envelope with $10,000 in it and tells him that the situation has changed because there are more parties to split the money across now. Cairo threatens Spade, but Spade remains calm, knowing they won’t hurt him while he is still in possession of the falcon.
Spade suggests that finding a fall guy is more pressing than the money anyway, because the police will not back off until they have someone to arrest for the murders of Thursby and Jacobi. He explains that the only reason he is able to treat the police the way he does is because he always provides them with a criminal at the end of the day. He suggests Wilmer as the fall guy because he likely did commit both murders and his guns match the crime. Gutman rejects this idea, insisting that he loves Wilmer like a son, and that it wouldn’t work anyway, because whoever they give up will simply tell the police about the falcon and everyone else involved. Spade argues that this will not matter because the district attorney is more concerned about closing cases and maintaining a good reputation than the truth.
While Wilmer remains stone-faced and unemotional at first, he grows more and more worried as Spade explains the plan, and he eventually lashes out. He threatens to shoot Spade, but Gutman steps in to calm him down. Spade suggests that Cairo could be the fall guy, but it would require more work to frame him. This prompts Cairo to suggest O'Shaughnessy as the fall guy, whom Spade is open to discussing if they can make it work. The betrayal shocks O'Shaughnessy, and she moves away from Spade. Cairo whispers something in Gutman’s ear, and Spade tells Gutman not to worry about Wilmer’s guns, as he’s taken them from him before. This provokes Wilmer into raising his gun, but Gutman reaches out and grabs him before he can shoot. Spade punches Wilmer in the face, knocking him out. This elicits a violent response from Cairo, who attempts to attack Spade before kneeling beside Wilmer’s unconscious body, sobbing. Gutman then agrees that they can use Wilmer as the fall guy.
Cairo’s affection for Wilmer makes Spade doubt that he will go along with their plan. He offers Cairo the option of not joining them, but warns him they cannot let him go free, so he would be turned in alongside Wilmer. With little choice, Cairo accepts the offer. With that sorted, Spade moves onto the next order of business, which involves establishing their story and ensuring that there are no loose ends.
Gutman provides information on both murders. He explains that they were following Thursby in an attempt to locate O'Shaughnessy. They met with him the night Archer was killed, but he remained loyal to O'Shaughnessy, so Wilmer followed him back to the hotel and killed him. They hoped that with her protector out of the way, O'Shaughnessy would be scared into making amends with them. This answer satisfies Spade, who asks what happened to Jacobi. Gutman claims that after they met with O'Shaughnessy and Jacobi onboard La Paloma, they agreed on terms for the falcon. However, O'Shaughnessy and Jacobi snuck away on the way to Gutman’s hotel. After a day of searching, they found O'Shaughnessy’s apartment. Jacobi tried to run away with the falcon and Wilmer shot him several times. However, Jacobi proved too tough to bring down and managed to escape. They then forced O'Shaughnessy to call Spade, pretending to be in danger to buy them time to find Jacobi.
With the details established, Spade asks O'Shaughnessy to make some food and coffee. Before she’s able to leave the room, Gutman requests she leave the envelope of money she picked up during the struggle with Wilmer. When he counts the money, he claims one of the $1,000 bills is missing. O'Shaughnessy denies taking it, but Spade takes her to the bathroom for a strip search to be certain. She does not have the bill on her, so Spade confronts Gutman and forces him to confess that he palmed it. Gutman concedes that he did it to see how Spade would handle the situation. They spend the rest of the evening reading and talking quietly while they wait for the morning.
In the morning, Spade calls Effie and asks her to retrieve the falcon from the bus-station locker. About an hour later she arrives at his apartment to drop it off. With everyone watching nervously, Gutman quickly tears open the package and uses a pocketknife to chip away at the enamel. However, rather than solid gold underneath the outer coating, he finds the bird is made of lead. They quickly realize the statue is a fake, and Cairo suggests that Kemidov tricked them after realizing its value when Gutman was so desperate to buy it from him. During the chaos, Wilmer escapes, and Gutman and Cairo resolve to go back to Constantinople to continue searching for the falcon. Gutman pulls a gun on Spade and demands he return the $10,000. Spade keeps $1,000 for his time and as a bribe to not call the police, and Gutman and Cairo leave the apartment.
Spade stands motionless for five minutes after Gutman and Cairo leave, contemplating what to do next. He calls Polhaus and tells him that Thursby and Jacobi were shot by Wilmer, that Gutman and Cairo are planning to leave town, and that he has evidence to prove all their guilt. He then urgently presses O'Shaughnessy to give him the remaining details. Reluctantly she tells him that Gutman hired her to retrieve the falcon from Kemidov and that she enlisted Cairo’s help. They then took the falcon for themselves, but she began to fear that Cairo would turn on her, so she asked Thursby for help. The two of them left Cairo in Constantinople and fled to Hong Kong. From there, fearing Cairo or Gutman would find them, they gave the package to Jacobi to transport it to San Francisco and took a different boat themselves. Wanting to keep the bird for herself, she hired Spade and Archer to tail Thursby, hoping he would think it was related to his gambling debts and either be scared away or kill them and be arrested. Spade deduces that it wasn’t Thursby who killed Archer because there was no way he would have been stupid enough to go down a dark alley with someone he was warned about. He accuses O'Shaughnessy of killing Archer with Thursby’s gun to frame him, and, believing Spade will help her, she eventually confesses.
However, Spade tells her that he’s going to turn her in, and that she’ll likely get sentenced to life in prison. At first, O'Shaughnessy is incredulous and thinks he is joking around. When she realizes he is not, she begins to question if he loves her. Spade claims that he might love her, but that it doesn’t make any difference, because “[he] won’t play the sap for [her]” (240). He then explains that he isn’t as crooked as he presents himself. Despite the fact he didn’t even like Archer, he was his partner, and he has to find justice for him. He also claims that as a detective, it is against his nature to let criminals go. It is also impossible for him to let her go without condemning himself to death or a life in prison, and he will not do that, regardless of how he feels about her.
When Dundy and Polhaus enter his apartment, Spade tells them that O'Shaughnessy killed Archer and gives them the guns, the falcon, and the $1,000 bill he kept from Gutman as evidence. He asks if they managed to catch the others, and Polhaus confirms they did, but that Gutman had already been killed by Wilmer when they arrived to pick them all up. The next morning, Effie asks Spade if it is true that he turned O'Shaughnessy in. She admits that he did the right thing but is still bothered that he would turn on somebody he loved. They are interrupted by the arrival of Iva, whom Spade regretfully calls into his office.
The theme of Greed and Loyalty comes to a head in the final chapters of the novel. Gutman and O’Shaughnessy both provide more background about what happened before they arrived in San Francisco, and it becomes clear that their desire to have the falcon for themselves led them to all turn on each other. This greed and self-interest is epitomized when Gutman, despite all his insistence that he loves Wilmer like a son, turns on him the moment it becomes necessary to get his hands on the falcon and ensure his own freedom. Moreover, it is still impossible to tell whose side O’Shaughnessy is on when they enter the apartment. Nonetheless, this disloyalty and the uncertainty it sows ensures the demise of both Gutman and O’Shaughnessy: Gutman is gunned down by Wilmer after turning on him, and O’Shaughnessy loses all trust with Spade.
Up until the final moments of the novel, Spade has waded through morally gray waters and appeared as self-interested as everyone else. However, his decision to turn O’Shaughnessy and the $1,000 bribe he received from Gutman over to the police demonstrates that he has been following a strict moral code the entire time—he even claims that his immorality is performative and helps him get business and catch criminals. His monologue ostensibly explains his reasons for turning on O’Shaughnessy and attempts to outline his moral code, but it also reveals that he is acting in accordance with his romanticized masculinity. He admits to having romantic feelings for O’Shaughnessy, but his masculinity prevents him from placing any value in love. Instead, it provides an opportunity to demonstrate how duty bound and honorable he is by choosing the law, the “truth,” and his partner over his feelings. He overcomes his emotions and sticks to the masculine dictum that males should never put a female relationship ahead of a male one—even if that male is despised. He also refuses “to play the sap for [her]” (240). Playing the sap would mean succumbing to his emotions and allowing O’Shaughnessy to be in a position of control over him—two things that are decidedly “unmasculine” for the patriarchal character and genre.
Finally, O’Shaughnessy’s fate at the end of the novel leaves her status in an equivocal state—neither wholly sexist nor empowering. She continues to adeptly navigate the situation and the men involved using the skills and tools available to her. She also maintains agency through her refusal to follow along with Spade or Gutman, despite attempts from male characters to minimize her. Gutman’s warning to Spade that he needs to be careful that she feels adequately remunerated after their deal makes his fear and respect of her abilities clear: She is dangerous, and a woman, a treacherous combination in their masculine world. Gutman’s warning continues to uphold the sexism and misogyny of the time, as a woman who is strong and capable and who moves throughout the story on equal footing with the male characters is considered a threat. Her fate at the end of the novel is meant as a warning or cautionary tale against women acting with the kind of sexual liberation, ambition, and agency that she demonstrates throughout the novel. The message continues to underscore the sexism throughout the novel and the ways in which female liberation is dangerous for the sleuthing male of the hardboiled novel. This idea is strengthened further by the fact that she faces this punishment because Spade rejects her as a romantic partner, reinforcing the belief of the time that women were more culturally accepted through marriage and through a relationship with a man.
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