Susan introduces Pete Seeger who is visiting the street for the day because his car had a busted chain so he is waiting for the garage to fix it. Pete says he has a song that is like a chain, where each verse leads to another. He sings "The Old Lady Who Swallowed a Fly".
Mr. Hooper brings everybody sodas and asks Pete where he learned all those songs. Pete compares them to a chain, because he learned them from people who learned them from other people. He sings the Woody Guthrie song “Why Oh Why”
One of the kids is sad because the chain fell off his bicycle. Pete says he has a chain, but Gordon says a bicycle is smaller than a car, so it needs a smaller chain. He takes the kid to the repair shop, while Pete sings a song about a bicycle: "Daisy Bell (Bicycle Built for Two)"
Cookie Monster and Ernie: Ernie has four apples, and wants to draw the number 4 to represent that quantity. Cookie Monster comes along and wants to eat an apple, so Ernie crosses out the 4 and draws a 3, but then Cookie Monster decides not to eat the apple, so Ernie crosses out the 3 again and draws another 4.