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Hugo, who waits for an opportunity to take revenge on Edward, takes the boy along with him one day and manages to get him falsely accused him of stealing the bundle of a woman. The police apprehend Edward, but a merciful judge and Miles Hendon help him to escape the punishment of law. Miles then takes Edward to Hendon Hall to introduce him to his family. However, he is in for a shock, for his brother Hugh, who has taken over the household after their father's death, pretends not to recognize him and has Miles and Edward arrested. The prison experience helps Edward, as he learns patience and perseverance from his fellow prisoners, who are mainly innocent victims punished cruelly by the law. He furthermore vows to repeal the harsh laws of the land and bring relief to the prisoners. After their release, he and Hendon head towards the palace to seek justice, but they get separated on London Bridge.
During this time, Tom becomes familiar with his duties and conducts himself with dignity. He also gains information about the palace and its affairs from Humphrey, his whipping boy. Slowly he starts enjoying the luxuries of life and the power of royalty and begins to be ashamed of his origins. When he is taken on a recognition procession through London shortly before his coronation, he recognizes his mother in the crowd but refuses to acknowledge her. He instantly feels guilty, and, after this incident, the trappings of royalty no longer seem glorious to him.
The last few chapters read like a fairy tale. The good are rewarded and the bad are punished. Tom Canty and Miles Hendon gain power and position and remain loyal to the throne. Nearly all the subjects Edward encountered who had suffered miseries during the reign of Henry VIII are released from bondage or are given compensation. John Canty is never heard from again, while Hugh Hendon leaves the country and dies soon after. Miles marries Edith, his true love, and leads a happy life. Edward rules mercifully and is remembered as a benevolent king.