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In this chapter, the lives of the animals worsen. They receive just enough food to make them work, and Napoleon takes advantage of them at every turn. But Farmer Frederick also takes advantage of Napoleon. When he decides to sell timber on the advice of Whymper, Frederick agrees to pay a sum of 12 pounds. Frederick wants to pay by check, but Napoleon insists on cash payment in five-pound notes. Frederick pays up and carts away the timber. Three days later, Napoleon learns that the notes are forged. He pronounces a death sentence upon Frederick and wants to boil him alive.
Expressing his fear of attack from the humans, Napoleon tells the animals to be prepared for an attack. The offensive comes while they are at breakfast. Fifteen men with half a dozen guns open fire on the farm. Napoleon and Boxer try their best to inspire the animals, but they find it difficult to retaliate. Many of them are wounded and run back to the farm buildings.
The enemies capture the farm and the windmill, which Frederick blasts with a dynamo. On seeing their windmill destroyed, the animals are incited to retaliate with a vengeance. In the battle, two geese are killed, and many cows and sheep are injured. Napoleon is wounded in the tail. Finally, the fierce dogs force the men to take flight, but not until the animals have paid a heavy price. In spite of the losses, Napoleon orders that the animals rejoice in their victory. The flag is hoisted and tributes are paid. Napoleon makes a speech and names the fight the 'Battle of Windmill'.
In spite of their many troubles, the animals refuse to believe that they are not living a utopian existence. They are constantly told by Napoleon and Squealer that their life on Animal Farm is much better than what they had before. They believe the propaganda, in spite of the fact that they are more hungry than they ever had been when Farmer Jones was their owner. When they are attacked by humans, however, they are at first too tired and hungry to react. When Frederick destroys their windmill, which is their pride and joy, he forces them to retaliate. They fight with a vengeance and succeed in driving the farmers away. Napoleon, in his typical dictatorial stance, orders them to celebrate the Battle of Windmill, which seems to be reflective of the German invasion of Russia during World War II.
Throughout the chapter, Napoleon is portrayed as a despicable tyrant, constantly displaying his power to his subjects. He perpetually lies to the animals, continues to change the amendments to suit his desires, requires a public celebration of his birthday, gives himself additional titles, and treats himself to drinking whiskey, which is strictly forbidden. Napoleon also tries to set farmer against farmer, but the plan backfires. He is tricked by Frederick when he is paid for timber with counterfeit money. Napoleon vows revenge; ironically, it is the humans that gain most of the revenge during the battle.