 Elizabeth breaks her engagement with Angus, but encounters an old friend from her days in Dresden, Baron Klaus Von Rimmer. As they become better acquainted, Elizabeth finds his tales of his German background and upbringing enchanting. Richard has his suspicions and talks to the Baron frankly -- what is it that he s after? He s protective of Elizabeth s feelings and wants Klaus to speak to him plainly. The Baron says he sells arms and would like for Richard to use his influence in the Admiralty to seal a contract with the British government -- a deal that would give the Baron access to classified British naval information. The Baron tries to sweeten the deal by offering Richard a bribe. Richard is no fool and sees the Baron for the spy he is. He undertakes to have the Baron arrested at the Eaton Place. What Richard doesn t know is that the Baron is in a homosexual relationship with Alfred, the Bellamy footman. When Alfred realizes that Richard is planning to have Klaus arrested at dinner that evening, he puts Klaus on to the plot. Dinner is about to served and Klaus graciously excuses himself. With Alfred at his side, the two leave in a hurry. Alfred will accompany Klaus back to Germany with no thought for Elizabeth and her feelings.