Portia is with the Prince of Morocco, who is courting her. Portia's father has made three caskets from among which her suitors must choose. If they choose the right one, they can marry her; if not, they must swear never to propose to another woman.
Lancelot, Shylock's servant, is debating whether to leave his master. His father, Gobbo, a Becketian figure who is blind and near senile, enters. He is looking for his son. Lancelot pretends to know a 'Master Lancelot' and says that he: "is indeed deceased, or, as you would say / in plain terms, gone to heaven." Gobbo is heartbroken when, in a mirror of the Jacob and Esau story from the Bible, Lancelot bends down before his father and admits to his trickery. Bassanio offers to take on Lancelot as his servant, to help give him the air of respectability he craves.
Jessica, Shylock's daughter, is having a love affair with Lorenzo, a Christian nobleman. She craves conversion to Christianity. Lancelot is complicit in their affair, and takes a note from Jessica to Lorenzo. When Lorenzo receives the note, he tells Lancelot to assure Jessica that he will not fail her. The noblemen are preparing for a masque in the city that night. Lorenzo tells his friends that he and Jessica plan to elope together that night, in the process stealing some of her father's wealth.
Shylock is portrayed as a stern and authoritative father. His representation in the Second Act is more negative than elsewhere in the play. He is dining with Bassanio that evening, and gives Jessica the key to the house, telling her that she must keep the shutters closed so she does not see the masque passing. Jessica's willingness to abandon and steal from her father marks her out as a rather ungrateful child. However, the Elizabethan audience would have thought it only right that the child of a usurious Jew should want to flee him and become a Christian. Lorenzo meets Jessica at Shylock's house (she is at the window in a scene reminiscent of Romeo and Juliet) and they steal away (literally) with gold and jewels. Antonio tells Bassanio and Gratiano that the wind is right and they will soon leave for Belmont.
The Prince of Morocco is presented with three caskets: gold, silver and lead. The gold casket reads:"Who chooseth me shall gain what many men desire"
The silver casket reads:
"Who chooseth me shall get as much as he deserves"
The lead casket reads:
"Who chooseth me must give and hazard all he hath"
The Prince chooses the gold casket as the one most likely to lead to so precious a woman as Portia. Inside is a gold skull. A message included with it moralizes that a love of wealth leads to unhappiness (a message proleptically suggesting Shylock's later fate). The Prince leaves.
Shylock now learns that his daughter has fled. He runs through the street, crying:"My daughter! O, my ducats! O, my daughter!
Fled with a Christian! O, my Christian ducats!
Justice! The law! My ducats and my daughter!
A sealed bag, two sealed bags of ducats,"
In Jewish tradition, ancestry is passed through the female line. Thus, whilst it may seem that Shylock is unsure which to mourn more: his daughter or the lost gold, he is actually mourning the loss of her inheritance and the continuance of his own line. Since his place in society is defined absolutely by his wealth, he has lost much of that which defines him: his beloved daughter, of whom he is rightly protective (given that she eloped with one of his enemies) and the fortune he has amassed in spite of the antipathy of the Christian community. Shylock holds Antonio responsible and demands that the bond be repaid in time.
The Prince of Aragon now arrives to woo Portia. He chooses the silver casket, thinking that the gold represents the desire of many men: the people of Venice. Inside the casket is the portrait of a blinking idiot, and a poem warning against self-love. The Prince leaves as a messenger arrives bearing tidings of an approaching group of noblemen. Portia secretly wishes that it might be Bassanio: "Bassanio, lord Love, if thy will it be!"
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