“Babylon Revisited” tells the story of Charlie Wales’ return to Paris in 1930, a year and a half after the stock market crashed and he moved away. The story begins with Charlie asking Alix, the barman at the Ritz, about all the characters that used to frequent the bar, but it seems that all of Charlie’s old acquaintances—except for a man named Duncan Schaeffer—have left Paris, no longer as fabulously wealthy as they had been during the boom years of the 1920s. Charlie, too, has changed. He works in Prague now, and has stopped drinking as much. Charlie leaves his brother-in-law’s address with Alix and instructs him to pass it along to Duncan Schaeffer if he sees him.
On his way to his brother-in-law’s house, Charlie looks at the streets of Paris from his taxi. He reflects on the years he spent in Paris and thinks that he spoiled the city for himself. The days had come and gone, until suddenly “two years were gone, and everything was gone,” and finally he himself was gone.
When Charlie arrives at his brother-in-law’s house, his nine-year-old daughter, Honoria, greets him warmly at the door. Inside, Lincoln Peters (Charlie’s brother-in-law), Marion Peters (his sister-in-law), and their two children are waiting for him. Charlie and Marion greet each other coldly. Lincoln asks Charlie about business in Prague, and Charlie responds that it’s going well—his salary was even higher last year than it had been before the crash—and although he is boasting for a specific purpose, he sees that it bothers Lincoln and stops himself. Charlie remarks that all the Americans seem to have cleared out of Paris, and though Marion replies that this fact delights her, Charlie reminisces that, for a period, being an American in Paris was like being a type of royalty—and that “it was nice while it lasted.” Without thinking, he mentions having been at the bar earlier that afternoon, and Marion quips that she thinks Charlie would have had enough of bars. Charlie explains that he has one drink every afternoon, and no more. There is an obvious and “instinctive antipathy” between Charlie and Marion, but Charlie thinks Marion’s aggressiveness will give him an advantage in the discussion he came to Paris to have.
At dinner, Charlie wonders to himself whether Honoria is more like him or her mother, Helen, and he hopes Honoria does not combine whatever qualities that had led him and Helen to disaster. He reflects that he believes in character as the “eternally valuable element,” and thinks that everything else wears out. After dinner he goes walking in Montmartre, a neighborhood full of bars and jazz clubs where he used to spend a great deal of time and money. Most of the bars are empty, and some have disappeared completely. What he once saw as the “effort and ingenuity” of Montmartre, he now sees as childish “catering to vice and waste.” Looking back on his days of drinking and squandering wild sums of money in this neighborhood, he regrets that he allowed his life to get so wildly out of control that his child was taken away from him and his wife “escaped to a grave in Vermont.”
The next day Charlie wakes up feeling refreshed, the “depression of yesterday” gone. He takes Honoria to lunch at Le Grand Vatel, the one restaurant he can think of that doesn’t remind him of the decadence of the old days. He and Honoria make a plan to go to the toy store and the vaudeville show, though Honoria objects that she doesn’t particularly want to go to the toy store, since she has a lot of things at home and Charlie already brought her a doll. While at lunch, Charlie runs into Duncan Schaeffer and Lorraine Quarrles, a stunning blonde whom he’d spent time with in the old days. Duncan and Lorraine try insistently to rope Charlie into a plan for dinner, but he repeatedly declines, telling them that he and Honoria have plans to see the vaudeville show and that he’ll call them. After they’re gone, Charlie feels that it was an unwelcome encounter with ghosts from his past.
At the vaudeville show, Charlie worries that Honoria will grow up without him having had a chance to influence who she’ll become. During intermission, they run into Duncan and Lorraine again and sit for a drink, but Charlie is distracted. After the show, Honoria says she wants to come live with Charlie in Prague, which makes his heart leap.
When Charlie arrives at the Peters’ later that evening, the atmosphere is tense. He tells them he’s “awfully anxious to have a home” and he wants to bring Honoria back to Prague with him. Marion, barely able to hide her contempt for Charlie, asks how anyone can count on Charlie to remain sober. Marion pointedly brings up an incident in which Charlie had locked Helen out of their home in a snowstorm and Helen had contracted pneumonia, nearly dying as a result. Charlie pleads with Marion, begging her to have confidence in him. He reminds her that his drinking only lasted a year and a half, from the time he arrived in Paris until he collapsed and ended up in a sanitarium—but before that he had a good track record. He expresses fear that he’ll lose Honoria’s childhood and his “chance for a home.” But Marion can’t put aside her contempt for Charlie and accuses him of being responsible for Helen’s death—a tactical misstep on her part—at which point it becomes clear to everyone in the room that Charlie has gained control of the situation. Charlie leaves with Lincoln’s assurance that he and Marion won’t stand in Charlie’s way. That night, Charlie has a dream about Helen in which she tells him she wants him to have Honoria.
The next morning, Charlie looks for a governess for Honoria and has lunch with Lincoln Peters, who tells him that he thinks Marion resents Charlie because of his wealth. When Charlie returns to his hotel, there’s a letter from Lorraine waiting for him in which she asks him to meet her, but Charlie doesn’t want to see her. He goes back to the Peters’ house that evening, and while he’s there, Duncan and Lorraine arrive, having gotten Lincoln’s address from Alix, the barman at the Ritz. They drunkenly ask Charlie to come to dinner, and when he declines they leave bitterly. Charlie tries to smooth things over, but the intrusion has disturbed Marion so thoroughly that she changes her mind about allowing Charlie to take Honoria back to Prague with him.
Charlie leaves the Peters’ and goes to the bar at the Ritz. The head barman, Paul, comes over to talk to Charlie, and says he heard Charlie lost a lot in the crash. Charlie says that he did, but that he lost everything he wanted in the boom. He calls Lincoln, who tells Charlie that he’ll have to wait six months before discussing Honoria’s custody again with Marion. Charlie thinks that tomorrow he’ll send Honoria a lot of toys, but then he becomes angry that all he can do is shower her with monetary gifts. He tells himself he’ll come back to Paris someday—that the Peters can’t make him pay for his mistakes forever. He’s sure his wife Helen wouldn’t have wanted him to be so alone.