Construction and renovations are underway at the restaurant property. Scaffolding platforms and ladders are in position to hoist a sign for the property - "Mildred's." "Silent partner" Monte Beragon pays the proud Mildred a visit, as she sits with her legs dangling down from a ladder. He leers at her legs:

Monte: It's moments like this that make me happy that nylons are out for the duration. [His comment reflects the rationing of nylons during WWII.]
Mildred: Well, if it isn't our silent partner.
Monte: I decided I've been silent long enough. I came by to check up on my investment.
Mildred: Well, how do you like it?
Monte: Delightful.
Mildred: Are you sure you're here to check on your investment?
Monte: Oh, absolutely.
Mildred: Well then, you'd better have a look at your investment. (She points out the various renovations and plans for the interior.)

Monte flirts with his investment partner and invites her to take the rest of the day off so they can go to the bar in his beach house, or take a swim: "Why don't you come down and see my ocean?..Why don't you and I go down and have a swim, and forget all about our investment?" Mildred politely declines, although with a hint of indecisiveness. Monte eventually persuades her to join him in a half hour: "As you grow older, you'll find that the only things you regret are the things you didn't do."

At the beach house, Monte presents Mildred with a closet full of bathing suits: "They belong to my sisters," he explains. She orders a drink, made "harmless." Although his family also has a "mansion in Pasadena, complete with iron deer, a ghost, and a greenhouse with no flowers," he confesses that he's "lonely."

Monte: You know, Mildred, in the spring, a young man's fancy lightly turns to what he's been thinking about all winter.
Mildred: It's a good thing California winters are so short.

He holds onto her beach robe as she walks by, revealing her white, two-piece bathing suit:

Mildred: No whistle?
Monte: I'd need a police siren.

After a romp in the ocean, they relax and share drinks in front of a fire-lit fireplace, with music playing on the record player. [The music is the same theme music that composer Max Steiner wrote for Now, Voyager (1942).] The idle-rich loafer describes himself as overindulgent:

I do too much of everything. Too spoiled...I'm such a self-controlled and dignified young fellow...I loaf, in a decorative and highly charming manner...With me, loafing is a science.

Appreciatively as he approaches closer, he describes Mildred as "very beautiful like that...You take my breath away...(softly). When I'm close to you like this, there's a sound in the air like the beating of wings. Do you know what it is?...My heart beating like a schoolboy's." The record gets stuck and plays over and over, as Monte leans down and kisses her. The camera pans over to the record player, and then further to the wall mirror, where the reflected image shows them kissing.

After Mildred is driven home in the pouring rain by Monte, a worried Bert rushes out of their Glendale home with the news that their younger child Kay is sick with pneumonia. Because Mildred was not at home during her idyllic time with Monte (and she couldn't be found), Bert frantically took Kay to Mrs. Biederhof's for care. Dr. Gale is summoned to treat Kay, who has been placed in an oxygen tent. The doctor is unable to save the sweet-natured girl and she expires - inevitably the result of Mildred's excesses. The family is shattered to witness the death, and Mildred clutches onto her remaining daughter with increased affection and devotion:

I'll never forget it. Never as long as I live. She said: 'Mommy,' and that was all. Oh I loved her so much. Oh please God, don't ever let anything happen to Veda.

Mildred concentrates on the opening of the restaurant and its success - a direct-mail postcard brings over-flow crowds to the opening. Spotlights advertise the special event:

(In voice-over): After that, there was only one thing on my mind - to open the restaurant and make it successful.

Ida works at the cash register as Mildred's hostess in the restaurant jammed with customers - the scene is prosperous and promising. Ida rifles through a wad of bills and gloats: "Isn't that a lovely noise?" Wally shares a table with Veda for the grand occasion, but he is soon commandered to be "Vice President in charge of the potatoes" in the kitchen. Monte arrives to bring a box of orchids for Mildred, asking Ida to deliver them ("Just tell her they came from an old gypsy fortune teller") - but jealous suitor Wally intercepts them and drops them into a refuse can in the kitchen. Veda recognizes Monte and snobbishly flatters him with attention:

Everyone knows the Monte Beragon. You play polo, go yachting, are an excellent hunter, and are seen with the most attractive debutantes in California. I read the Society section.

While Mildred has been pre-occupied with the restaurant, Veda has been making her own advantageous play toward Monte. The playboy reads her fortune from her palm: "It says that you are very much indeed like your mother."

As the restaurant closes down after the profitable night (a cook's revolving wheel is first full, and then empty with the lights turned out), Veda and Monte dance next to a juke-box. Mildred is too exhausted to do anything but sit and rest: "Oh, I'm so tired I don't know whether I'm walking on my feet or my ankles."

The twisted relationships between the main characters is evident in the ensuing conversation:

Mildred: Wally, do me a favor...Take Veda home.
Wally: What?
Veda: Anyone would think I was a child.
Mildred: You are, and besides, it's past your bedtime.
Wally: Well it's not way past my bedtime. (To Mildred) Besides, I want to take you home.
Mildred: Wally, I've got to close up. I'll go home with Ida. Please, come on.
Wally: OK, OK. Sure was a big night for me. I come out looking for an evening of fun and laughter and what do I get? Dishpan hands and a date with a Girl Scout.
Mildred: Good night, darling.
Veda: Good night, Mother. (To Monte) Goodnight, Mr. Beragon. Thank you for everything. I trust that we may meet again very soon.
Monte: Oh, I hope so.
Wally: (mocking) Thank you for a divine evening, Mrs. Pierce. And I trust that I might see you again in the not too distant future. (To Monte) Good night. (To Veda) Come on, small fry. Come on, hurry up. (As he leaves, Wally leers at Ida as she adjusts something under her dress)
Ida: Leave something on me. I might catch cold.
Wally: Just thinking. Not about you.

After everyone has left, Monte romances Mildred and impatiently kisses her as she is closing up the books: "I've been waiting all evening. A lifetime." [Again, the theme music from Now, Voyager plays on the soundtrack.] Mildred's estranged husband Bert barges in during the middle of their embrace and deliberately slams the restaurant door shut to announce himself. He speaks to Mildred privately, agreeing to the divorce while avoiding looking at her:

It's about the divorce, Mildred. You can have it. When I walked out on you that time, I told you to see if you could get along without me. I didn't think you could....Now I know better. You're doing all right, Mildred. You're doing fine. (He glances over at Monte)...Well, that's that. That's what I came to say...I just want you to know that I wish you all the luck in the world.

Inopportunely, Monte proposes a drink for all of them with a proverb:

In the Beragon family, there is an old Spanish proverb. 'One man's poison is another man's meat.'

The tasteless, insulting remark prompts Bert to violence, and he savagely knocks away the drink offered to him. Mildred and Monte both look aghast and glare at Bert - reacting to his sudden jealous rage.

END OF FIRST FLASHBACK

At this point, the film dissolves back to Mildred who is seated in detective Peterson's office. Her face is once more in half-shadow, marking her with darkened guilt. [The scene is counter-poised with the previous one, in which Mildred was experiencing a successful, independent career.] She describes her growing affection and feelings for the victim, unintentionally providing circumstantial evidence that Bert was indeed the murderer:

Mildred: I was in love with him and I knew it for the first time that night. But now he's dead and I'm not sorry. He wasn't worth it.
Peterson: That may be. Whoever killed him evidently agreed with you. But you still haven't given us one good reason why your first husband wasn't the murderer. In fact, you've given us a very good reason why he was. Now look at it our way. One - Beragon was killed with Pierce's gun. Two - Pierce cannot account for his movements at the time of the murder. Three - He had a motive. You've just given it to us, Mrs. Beragon. Jealousy!

Peterson presses for more information from Mildred, asking about her trip to the beach house with Wally:

Peterson: Did you know that Beragon was lying there dead?
Mildred: No, I didn't ...
Peterson: Then you were at the beach house this evening. Why didn't you tell us that before? And why did you run away from the house? Wasn't it because you knew Beragon was there - dead? And if you did know, why were you trying to pin the murder onto Fay - why? I think you'd better tell us the truth now.
Mildred: I did it. I killed him.
Peterson: But why? Your restaurant was a success. You were in love with Beragon. What happened to all that?

START OF SECOND MAJOR FLASHBACK

Mildred's explanation of why she now claims to be the murderer turns into the film's second major flashback. She first describes how she successfully and prosperously branched out and expanded to a large, lucrative chain of LA eateries, in order to provide for her profligate daughter:

The restaurant was a greater success than I knew that night. The profits were enormous. In a few months, I opened up another place [Beverly Hills], and then I started a chain. In three years, I'd built up five restaurants. Everywhere you went, I had a restaurant. They made money. Everything I touched turned into money and I needed it. I needed it for Veda. She was becoming a young lady with expensive tastes. Veda was growing up.

Now that it is 1944, the real estate-rich, propertied, ne'er-do-well gigolo Monte is cash poor, and he begins to exploit Mildred for her money - accepting handouts of cash. His extravagant purchases include monogrammed shirts and expensive polo equipment from a saddlery:

At first, it bothered Monte to take money from me. Then it became a habit with him.

The records show that Monte spent $1,480.29 in six months, even though the restaurant was paid off a year earlier. Wally, Mildred's business manager and one-third partner, feels jilted, incensed, bitter and angry at Mildred for her spend-thrift attention toward Monte:

...keeping Monte Beragon in monogrammed shirts is not my idea of business...I've conned everybody until I'm blue in the face and for what? So you can have a lap dog named Beragon?...When you walked out on Bert, it was OK with me. I was glad to see you get some sense in your head. But now you're falling for a guy that's a worse foul ball than Bert ever thought of being...I'm not the type that likes to be left out in the cold. The only reason I helped you was so I could be around when you changed your mind about me. Maybe I was wrong...You're makin' a mistake, Mildred. This Beragon is no good. He'll bleed ya dry.

In the office of her Beverly Hills restaurant, Mildred stops Wally in his tracks to tell him what she feels for Monte: "Suppose I'm in love with him." As Wally promptly leaves the office, he passes Ida:

Wally: I hate all women.
Ida: My, my.
Wally: Thank goodness you're not one.

When Mildred tells Ida of her true feelings for Monte, however, she presents a different view of her diminishing attraction: "I thought I was once, but not now." Veda is also becoming a financial burden - her birthday gift is a $1,800 car - a "shiny thing a block and a half long" parked on the street. And Veda has been "borrowing money," mostly from the restaurant waitresses when she is accompanied by Monte. At that moment, Veda appears in Mildred's office with profligate Monte in tow:

Monte: I hope we aren't interrupting a big business conference.
Ida: Just a teeny one.
Monte: Oh, I wish I could get that interested in work.
Ida: You were probably frightened by a callous at an early age.

Veda has begun smoking and uses an elegant cigarette case given to her by her older admirer - it is symbolic of her introduction to his adult, sophisticated, and glamorous world: "And I couldn't hurt him by not using it. I mean, that would have been dreadfully recherche, n'est-ce pas?"

After Mildred gives Veda the keys to her new car, the rakish Monte suddenly takes credit for the present and accepts a kiss from Veda: "Hey, how about me, young lady? After all, I picked it out, you know." Veda drives off in her new vehicle. Because Monte is hung up over her daughter, Mildred faces the indolent Monte with a stern favor:

Stay away from Veda...And it isn't funny. She's only seventeen years old and spoiled rotten.

Mildred is struggling to regain control and is concerned about losing her self-indulgent daughter to him:

Mildred: Look, Monte, I've worked long and hard trying to give Veda the things I never had. I've done without a lot of things, including happiness sometimes, because I wanted her to have everything. And now I'm losing her. She's drifting away from me. She hardly speaks to me anymore except to ask for money, or poke fun at me in French because I work for a living...I blame it on the way she's been living. I blame it on you.
Monte: I don't think you understand Veda very well. She's not like you. You'll never make a waitress out of her.
Mildred: You look down on me because I work for a living, don't you? You always have. All right, I work. I cook food and sell it and make a profit on it - which I might point out you're not too proud to share with me.
Monte: Yes, I take money from you, Mildred. But not enough to make me like kitchens or cooks. They smell of grease.
Mildred: I don't notice you shrinking away from a $50 dollar bill because it happens to smell of grease.

Disenchanted by Monte's profligate ways and his attention to Veda, Mildred coldly dismisses Monte: "You're interfering with my life and my business. And worst of all, you're interfering with my plans for Veda and I won't stand for it." As he departs, he interjects: "You can go back to making your pies now, Mildred. We're through." With a final gesture of charity and to clear the books, Mildred writes a substantial check to cover Monte's expenses (marked 'paid in full') for taking Veda out. Her unemotional face is framed by a window as she watches Monte leave - she drops the venetian blinds with a crash.

Veda's predatory instincts cause her to scheme to marry a young, innocent boy whom she doesn't love - Ted Forrester (John Compton), the son of a wealthy family in Southern California. Wally is ready to assist and "settle the case out of court - that's the clean, quick way to handle the situation." In the Forrester's library, an attorney reads the legal document that renounces the legality of the 'marriage'. Manipulatively, Wally argues the case for a financial settlement of ten thousand dollars and Veda explains the money's pretext: "I need the money. I have to think of the future...I'm going to have a baby." The presiding attorney accuses Wally of "moral blackmail," but assents to the preposterous demand.

Back in the Pierce home, Veda reclines on the sofa and admires the $10,000.00 cashier's check made out to her after her dissolved 'marriage' - she kisses it. Jokingly, she callously admits to Mildred that the whole thing about the baby was a fraudulent sham:

Veda: At this stage, it's a matter of opinion. And in my opinion, I'm going to have a baby. I can always be mistaken.
Mildred (horrified): How could you do such a thing?! How could you?
Veda: I got the money, didn't I?
Mildred: Oh, I see.
Veda: I'll have to give Wally part of it to keep him quiet, but there's enough left for me.
Mildred: Money - that's what you live for, isn't it? You'd do anything for money, wouldn't you? Even blackmail.

In their second major confrontation, Mildred passively accepts her unloving daughter's mounting, humiliating tirade against her regarding her low-rent, lower-class birth:

Mildred: ...I've never denied you anything - anything money could buy I've given you. But that wasn't enough, was it? All right, Veda, from now on, things are going to be different.
Veda: I'll say they're going to be different. Why do you think I went to all this trouble? Why do you think I want money so badly?
Mildred: All right, why?
Veda: Are you sure you want to know?
Mildred: Yes.
Veda: (with gritty intensity) Then I'll tell you. With this money, I can get away from you.
Mildred: Veda!
Veda: From you and your chickens and your pies and your kitchens and everything that smells of grease. I can get away from this shack with its cheap furniture, and this town and its dollar days, and its women that wear uniforms and its men that wear overalls.
Mildred: Veda, I think I'm really seeing you for the first time in my life and you're cheap and horrible.
Veda (venomously hateful): You think just because you've made a little money you can get a new hairdo and some expensive clothes and turn yourself into a lady. But you can't, because you'll never be anything but a common frump, whose father lived over a grocery store and whose mother took in washing. With this money, I can get away from every rotten, stinking thing that makes me think of this place or you!

Now passionate and enraged, Mildred grabs for Veda's purse, extracts the pay-off check, and tears it into pieces. Veda slaps Mildred across the face, knocking her down. With a glaring, hateful look, Mildred rises and stands face to face in front of Veda. With her face set in a furious expression, she commands:

Get out, Veda. Get your things out of this house right now before I throw them into the street and you with them. Get out before I kill you.

Veda hesitates for a moment, and then rushes up the stairs to pack. To escape the confusion and hurt of her domestic life, Mildred travels and escapes to Mexico on a train:

I went away for a while. I traveled. But not far enough. Something kept pulling me back. Finally I gave in. I went home.

Mildred tries to forget about her daughter, but cannot. At the Beverly Hills Restaurant office, as Mildred lights Ida's cigarette, her hand trembles and Ida notices. Appearing bitter over failures in her personal life, Mildred has degenerated to the point where she needs a drink regularly:

Ida: You never used to drink during the day.
Mildred: I never used to drink at all. It's just a little habit I picked up from men.
Ida: Oh, men. I never yet met one of them who didn't have the instincts of a heel. Sometimes I wish I could get along without 'em.
Mildred: You've never been married, have you, Ida?
Ida: No. When men get around me, they get allergic to wedding rings. You know, 'Big sister type. Good old Ida. You can talk it over with her man to man.' I'm getting awfully tired of men talking to me man to man. I think I'll have a drink myself.
Mildred: I'll take mine straight.
Ida: Well, if you can take it, I can.